On July 15, AED lead a coalition of 28 other construction industry groups in delivering a letter to House and Senate leadership urging Congress to reinstate depreciation bonus and increased Sec. 179 expensing levels.
The coalition’s letter underscored the positive impact of these incentives on cash flow, job creation and the adoption of newer, more efficient technology. Though lawmakers acted on bonus depreciation and higher Sec. 179 levels in 2014, they waited to do so until mid-December and only applied the benefits to that calendar year – businesses had spent most of the year in the dark on whether they would be able to write off a significant portion of the cost of new machinery purchased in the previous 12 months.
To avoid such uncertainty, and to maximize the benefit of capital investment incentives, the group urged Congress to act sooner rather than later to provide motivation for industry to invest in new equipment. In addition, the letter reminded leadership how these provisions fit into the larger scheme of investing in the American economy:
“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 encouragement is timely, as the Senate Finance Committee approved legislation reinstating a full package of “tax extenders” for 2015, including bonus depreciation and Sec. 179, and extending their benefits into 2016. In the House, the Ways and Means Committee is not expected to debate the issue until September.
Add your voice to this effort, visit AEDaction.org now and tell Congress to help you invest in your business and community. Stay tuned as AED leads the fight to secure long-term capital investment incentives for the construction industry.
