AED, other construction-industry leaders ask Congress to revive tax incentives

The Associated Equipment Distributors (AED), along with a coalition of 28 other construction industry groups, sent a letter to Congress last week asking for them to reinstate the depreciation bonus and to increase Section 179 expensing levels.

The depreciation bonus allows businesses to write off more of the cost when purchasing new equipment. Section 179 gives construction businesses the ability to expense the purchase of new and old equipment up to a certain level.

The letter said these incentives allow the industry to offer more jobs and obtain better, newer technology. Congress reinstated bonus depreciation and went with higher Section 179 expensing levels in 2014, but did so in the middle of December and only applied it to that calendar year, preventing businesses from planning on how to capitalize on these incentives. AED hopes this letter will encourage Congress to act sooner.

“We also respectfully remind you that depreciation bonus and Sec. 179 are just one part of a larger economic equation,” the letter said. “These capital-investment incentives are just that, incentives; they are not, alone, reasons for businesses to make new purchases. For that to happen, business owners must be profitable and optimistic about the future. Unfortunately, the historic uncertainty surrounding the federal highway program has undermined confidence in the construction sector and made some firms reluctant to invest.”

The Senate Finance Committee already has voted to reinstate a selection of "tax extenders," which included these two provisions. The issue is expected to come up in the U.S. House in September.

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Associated Equipment Distributors

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