Bonus Depreciation Tax Credit Expires
Congress went home at the end of 2013 without extending a tax deduction that is credited with helping boost truck sales during choppy economic times.
Bonus depreciation, as the provision is known, allowed fleet owners and operators to write off 50% percent of the cost of new trucks and equipment purchases during the first year of ownership in 2013. That benefit is set to expired Dec. 31.
Usually, depreciation is written off gradually as the new asset loses value with age. Congress created the bonus depreciation program in 2010 to help the manufacturing sector from the recession.
Owners buying equipment for their businesses could write off 100% of their purchase cost in the 2011 tax year. The benefit was extended under the deal that avoided the “fiscal cliff” in 2013 but at the reduced level.
“It did help truck sales,” said Bailey Wood, a spokesman for American Truck Dealers, a division of the National Automobile Dealers Association. “It wasn’t the single thing that is bringing the economy around, but we think things are moving in the right direction, and it’s a benefit we as truck dealers would like to see continued.”
Congress still could vote in 2014 to extend the bonus depreciation program along with other business tax benefits that are expiring, and apply them retroactively. “We think that could very easily be passed through Congress,” Wood said.
