SEMA joined with the National Association of Manufacturers and a number of other organizations in urging Congress to extend the 100% bonus depreciation through 2012. The depreciation had been at 100% since 2010 but dropped to 50% January 1, 2012. Lawmakers are considering whether to include the extension within a larger bill to extend the payroll tax cuts for the rest of the year. The depreciation provision would allow businesses to write-off 100% of the cost of new equipment in the first year rather than depreciating the cost over multiple years. SEMA contends the depreciation write-off encourages companies to invest in newer, more efficient equipment and spurs sales and creates jobs.
The White House supports the bonus depreciation extension and has included the provision in its own $48 billion small-business growth proposal. Other elements of the Obama administration program would include an elimination of capital-gain taxes from investments in small businesses, a 10% tax credit for companies that create new jobs in 2012 and a termination of country-specific immigration caps for skilled worker visas. The proposal must be approved by Congress in the form of legislation.
For more information, contact Dan Sadowski at dans@sema.org.