Two of the major provisions in the legislation are in areas that its contractor members have consistently voted among their top ten legislative priorities, says ACCA. First, the bill will increase the maximum dollar amount that can be expensed by a contractor from $25,000 to $100,000 for property placed in service in 2003, 2004, and 2005. This amount, as well as the increased phaseout level of the deductible amount (which doubles to $400,000 for the years in question), will be indexed to inflation.
The bill also defines off-the-shelf computer software placed in service in 2003, 2004, and 2005 as qualifying property.
Second, the final legislation increases the first year depreciation allowance to 50% from 30% for property acquired after May 5, 2003 and before January 1, 2005.
"These provisions will help contractors purchase the vehicles and property they need to operate while reducing their tax burden so they can continue to create jobs in their local communities," said Paul T. Stalknecht, president and CEO of ACCA.
"It's a very important victory for our industry. ACCA would like to thank Speaker Hastert, Majority Leader Frist, respective committee chairmen Thomas and Grassley, and the members of Congress from both parties for forging this vital compromise legislation. But mostly we applaud President Bush for his leadership and commitment to economic stimulus, and for recognizing from the outset the importance of providing support to America's small businesses."
Publication date: 05/26/2003