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New small business right-off

Discussion in 'Business Fundamentals' started by kojak, May 16, 2003.

  1. kojak

    kojak Member
    Messages: 32

    I was watching CNN and they mentioned the new tax relief plan, which they said includes a $100,000 write off for small businesses to purchase new equipment. I was wondering how this worked, what time period this is for, what equipment is covered, and if this covers one time full purchase of equipment that is usually devalued over a time period, like a vehicle. If someone has a link to the actual code please include it.

    As well let's hear some opinions on whether this will work.

    Thanks
     
  2. Workhorse2500

    Workhorse2500 Junior Member
    Messages: 24

    Reply

    I'm glad you brought this up, I have been wondering about it as well. I was reading something that if it did get passed, that it has to do with vehicles with a 9000 gvwr rating. So you could buy a H1 Hummer and write off the majority of it. I do not know how it works and what the details are, but can't wait to hear them. The only bad thing I see for it, is that it could level your competitors equipment off with yours. For example, your company could have a reputation with reliability, but now that business with an old, unreliable plow truck could be on your level. Correct me if I was wrong on any of this, anyone.
     
  3. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    http://www.smbiz.com/sbwday.html

    Go to May 8th to read details. Mainly, it's an increase to $75,000 in the Section 179 amount that can be deducted in one year to (the year purchased and not depreciated after that). There are other provisions, too.
     
  4. Chuck Smith

    Chuck Smith 2000 Club Member
    from NJ
    Messages: 2,317

    The section 179 deduction (as far as SUV's) has been discussed here recently. I believe Tommy10plows started the thread. I'll see if I can dig it up.

    ~Chuck
     
  5. digger242j

    digger242j Senior Member
    Messages: 672

    I'm curious, because Kojak is from north of the border, and the three replies above are from south of the border, does the question posed in the thread pertain to American or Canadian tax law?
     
  6. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    digger242j, just a wild guess but I'd say American since the link was to references to the IRS rules.

    Maybe kojak has some US business interests? That would also explain his reference to $100,000 (approx = $75,000 US?)

    Workhorse2500, remember that to take the deduction they have to buy the equipment in the first place.

    "For example, your company could have a reputation with reliability, but now that business with an old, unreliable plow truck could be on your level." But now they would have nice, new equipment, too.
     
  7. Workhorse2500

    Workhorse2500 Junior Member
    Messages: 24

    Reply

     
  8. kojak

    kojak Member
    Messages: 32

    Actually my interest regard the fair and equitable business practices clause of NAFTA. Depending on how your tax laws work for businesses, it will affect trade relations between the countries. Softwood lumber tariffs, and the litigation from them are a good example. If we are aware of your new tax laws, we can project how they will affect these trade relations, and take a projection as to how this will affect our economy, especially the value of our dollar, and interest rates.

    In the past week our dollar has reached a five year high, and interest rates have continued to drop, if I see this new package changing those to moving in opposite directions I will lock in some loans at a long term rate immediately, or if I see the situation as positive for our economy, I'll wait.payup
     
  9. BRL

    BRL PlowSite.com - Veteran
    Messages: 1,277

    Workhorse,
    You had brought up the point that unreliable competition might now be perceived as reliable. What Mick is saying is that isn't necessarily too much of a worry because that unreliable competition is probably not going to suddenly go out & purchase 75 grand worth of new equipment because they can now write that off the first year instead of writing it off over a depreciated several year period. He wasn't referring to you, but to your comment ;) Those contractors will need a little more incentive for that purchase, like having the money or credit to buy it. Most likely if they are unreliable, they won't have either?
     
  10. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    Thanks, BRL. Yes, that's what I was trying to get across. I just hadn't replied as I've trying to formulate an explanation without making it worse.
     
  11. Workhorse2500

    Workhorse2500 Junior Member
    Messages: 24

    Very sorry Mick. When reading your last post, I skip over where you inserted a quote from my post. And by the time I read it over again, I already replied back, in a rude way. Please accept my apologies and I do see your point about the competition.
     
  12. Mick

    Mick PlowSite.com Veteran
    from Maine
    Messages: 5,546

    No problem, Workhorse2500. That's the problem with Internet communication - you don't always get the meaning behind the words, even with emoticons.

    As far as I can remember, I've only been deliberately rude once and that was a couple years ago with a former member who was really asking for it.

    I know I said it before, but Welcome to Plowsite.:waving:
     
  13. BRL

    BRL PlowSite.com - Veteran
    Messages: 1,277

    LOL FWIW I didn't read "rude" in Workhorse's reply, just misunderstanding Mick's point. Glad I could help :waving:
     
  14. snowplowjay

    snowplowjay Banned
    Messages: 890

    Heres two extremely useful links. My father is looking into this for his business and two friends of his have recently used this tax break and are very happy with the results. The first is a hot link from the Clark Howard radio show http://clarkhoward.com/topics/suv_taxbreak.html

    The second is from the Detroit News
    http://www.detnews.com/2002/autosinsider/0212/23/c01-38875.htm


    Its funny this was brought up on plowsite since i actually first heard about it on the Clark Howard show late one night this winter while out plowing in the middle of a snow storm.


    Jay