Transair Aluminum Pipe

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Economic Stimulus Act May Spur Capital Investment

The Economic Stimulus Act of 2008 provides incentives to businesses to make purchases they may have otherwise put off another year. The incentives include a 50% depreciation allowance for 2008 purchases and an increase in the small business expensing limitation for tax years beginning in 2008.

So how does Transair fit into the stimulus act? Because Transair is movable/removable, it can be considered capital equipment instead of a plant fixture, so the depreciation rules are different. What the stimulus package says is that 50% of the cost of a Transair System (materials only) can be written off corporate taxes in 2008.

Here are the details per the IRS:
Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property over several years. It is an annual allowance for the wear and tear, deterioration or obsolescence of property.

The new law provides 50% bonus depreciation for qualified property. The eligible property will be the same as what was covered in previous bonus depreciation measures, and must be new and placed into service in calendar year 2008. This is available to businesses of any size.