AEM President Comments on Depreciation Bonus

May 1, 2008 • The Association of Equipment Manufacturers recently released a statement from Dennis Slater, president, regarding the depreciation bonus in the economic stimulus package.

 

As rebate checks go out to American people, the U.S. economy is expected to benefit from the economic stimulus package passed by Congress and signed in February 2008 by President Bush. But businesses will also benefit from an important but less publicized provision in the package, according to the AEM statement.

”AEM strongly supported the economic stimulus legislation, especially the section that provides a bonus depreciation for businesses to deduct 50 percent of the cost of new equipment purchased and placed into service in 2008,” said Slater. “A healthy equipment industry contributes greatly to the overall strength of the economy, helping Americans to keep jobs.”

According to Slater's statement, in a recent poll of AEM construction equipment manufacturing members, 60 percent of respondents said that the bonus depreciation provision will provide their customers with an incentive to purchase new equipment. Manufacturers expect the bonus depreciation will spur business investment in new capital goods by reducing the current year cost of the asset. Temporary bonus depreciation provisions passed in 2003 have been credited with boosting business spending by 4 percent in the six months following enactment.

More details about the requirements of the depreciation bonus and what it means to equipment buyers are available online in a brochure produced by AEM with the Associated Equipment Distributors (AED). Email dkinsey@aem.org for more information.