New Tax Legislation Offers Significant Incentives for Customers Purchasing Equipment

On February 13,2008 the Economic Stimulus Act of 2008 was signed. This Act dramatically increases the value of depreciation allowed on equipment purchases. Both purchased and financed equipment may qualify.

What is Bonus Depreciation?

For qualifying equipment the Act allows the buyer to take additional 50% bonus depreciation on their 2008 taxes

• Economic Stimulus Act allows additional first year depreciation of 50% of purchase cost.

• Depreciation Bonus helps bussinesses that buy equipment this year to cut their 2008 tax bill.

• Applies to purchases of tangible property with a MACR's recove.ry .period of 20 years or less.

• Equipment must be new, purchased and placed in service in 2008.

• Not applicable if a binding purchase contract exist.ed prior to 1/1/08.

• The Depreciation Bonus is due to expire 12/31/08.

What is Section 179?

Section 179 allows small businesses to depreciate up to 100% of the equipment cost in one year.

• Eligibility for this deduction is based on the total amount of capital expenditures during 2008.

• This can be combined with Bonus Depreciation.

• If the customer has less than $800K in capital expenditures they may qualify for a dollar for dollar deduction up to $250K.

• Every dollar spent over $800K is subtracted from the total deduction amount (decreasing deduction to $0 when $1,050M is spent).

• If a company's capital expenditures exceed $1,050M they do not qualify for section 179.

• Equipment can be new or used. Must be placed in service in 2008.

• Not applicable if a binding purchase contract exists prior to 1/1/08.

• Section 179 Bonus is due to expire 12/31/08.