The Associated Equipment Distributors (AED) is lobbying for extension of the Economic Stimulus Act's (ESA) depreciation bonus and increased Sec. 179 expensing levels through the end of 2009.
Under current law, the depreciation bonus will expire at the end of 2008 and the higher Sec. 179 levels only apply to 2008 tax year. (More info about the ESA is available at http://www.depreciationbonus.org).
In a letter to President Bush, House Speaker Nancy Pelosi, and the House and Senate majority and minority leaders, AED President Toby Mack and National Utility Contractors Association (NUCA) President Bill Hillman said that the recent AED-NUCA economic study (available at http://www.aednews.com/aednuca) shows that extending the ESA would provide considerable economic stimulus through next year, the AED notes in its Washington Insights newsletter.
Mack and Hillman told Congress that more than three-quarters of the contractors who responded to the AED-NUCA survey said that if the ESA's capital investment incentives were extended they would be more likely to buy additional equipment in 2009. Seventy-six percent said they would be more likely to buy equipment next year if the depreciation bonus was extended and 77 percent said the same about the increased Section 179 expensing levels.
The letter also urged Congress to pass additional infrastructure investment stimulus before the end of the year, saying that doing so would lead to immediate hiring and equipment purchasing by contractors. House Democratic leaders have indicated a strong desire to enact another major stimulus bill focusing on infrastructure. ESA provides contractors with an incentive to buy equipment; infrastructure stimulus would provide a reason to do so, according to the AED.
AED is discussing the depreciation bonus and Sec. 179 extension with lawmakers, senior congressional staff, and industry allies. They are also working with distributors in Iowa, Nevada, Kentucky, Arkansas and Montana to weigh in with key Senate leaders and Finance Committee members to urge that ESA extension be included in the tax extenders bill the Senate will take up in September.
The AED notes that although the response to its efforts has been positive, given the fact that Congress is set to adjourn for the year in less than a month, ESA extension is far from certain. Thus, AED members (and their customers) should not defer necessary equipment purchases (and potentially miss the opportunity to take advantage of the ESA) on the off chance the depreciation bonus will be extended.