A Nice Bonus from Congress
A NICE BONUS FROM CONGRESS
Blog post from Jane Clark, Vice President of Member Services, NationaLease
Looks like the trucking industry got a little gift from Congress late last year with the extension of Bonus Depreciation through 2019. It was a nice switch from the previous year-by-year extensions which made planning difficult.
Here is what Congress said: for 2015 through 2017, bonus depreciation is 50% and then phases down to 40% in 2018 and 30% in 2019. It was part of the overall tax extenders package passed by Congress on December 18.
Kenneth Mains, chief financial officer of Hogan Truck Leasing, St. Louis, Mo., a NationaLease member, says this is a positive change in that it allows fleets and other businesses to do some proactive procurement planning and tax planning because they know that Bonus Distribution is in place for the next several years.
“As bonus depreciation is only specific to new property — used trucks are ineligible — it may spur some purchases in 2016 and 2017,” he says.
Since the rates drop from 50% to 30% and then expire beyond 2019, fleets may want to consider changing their trade cycle to take advantage of the higher depreciation rate available during the next two years.
Vanessa Ciervo, finance manager of H. K. Truck Center in South Plainfield, N.J., a NationaLease member, observed, “Bonus Deprecation being extended is just as important to our retail customers who purchase from us on the dealership side as it is to our own rental and leasing division. This extension is exciting for all types of businesses who can now free up cash to put back into their business and their growing fleets.”
Mains says there are some other positive impacts to the modification of Bonus Depreciation that took effect with the passage of the extender. They include the fact that after 2015 the provision allows additional first-year depreciation for qualified improvement property without regard to whether the improvements are property subject to a lease.
It’s always a bonus to receive a gift and this one is especially appreciated since we were expecting the usual one-year extension. As Mains says, “It is more impactful due to the longer extension period even with the phase down in percentages.”
About NationaLease: Founded in 1944, NationaLease is one of the largest full service truck leasing organizations in North America, with over 700 service locations throughout the U.S. and Canada and a combined customer fleet of over 125,000 tractors, trucks, and trailers. The company provides comprehensive fleet management services for private fleets and transportation service providers. More information can be found at nationalease.com.
About H.K. Truck Center: H.K. Truck Center is a certified Hino and Mitsubishi Fuso truck dealership providing clients with expert sales personnel, quality-conscious maintenance and repair service, a huge inventory of parts, convenient rental services and a high standard of workmanship. Established in 1982, H.K. Truck Center has earned a reputation for its excellence in both customer service and client relationships. They have often received recognition for their accomplishments, ranking #1 in New Jersey for their Hino service and sales, and remain on the cutting edge of industry technology and new opportunities with factory-trained technicians and ever-expanding product programs. To learn more about H.K. Truck Center, visit www.hktruck.com, follow us on LinkedIn, Google Plus, and Twitter @hktruckcenter, like us on Facebook or call at (908) 754-3330.
This article was written for FleetOwner.com. H.K. Truck Center claims no authorship to it’s content or ideas. Reposted from fleetowner.com blog on January 8, 2016. Click here to view the original article.