February 13, 2008
Contact:
Paul Freedenberg
703-827-5282
pfreedenberg@AMTonline.org
AMT President praises new Economic Stimulus Package and attends White House Signing Ceremony
Demonstrating the importance to the manufacturing technology industry of the Economic Stimulus Package recently passed by Congress at the urging of AMT-The Association For Manufacturing Technology, AMT President John B. Byrd III joined other business leaders today at the White House when President Bush signed the bill into law.
Officially named “The Recovery Rebates and Economic Stimulus for the American People Act of 2008,” it provides tax relief for both individuals and businesses.
The business tax relief comes in two forms:
- Fifty percent bonus depreciation for new capital expenditures like machine tools ordered and placed into service during 2008, and
- An increase in how much small businesses can write off for new and used equipment purchases in 2008.
“We fought hard for both of these provisions,” said Byrd before leaving for the White House. “They will help many of our AMT member companies and their customers increase their productivity. Congress and the President have produced an economic stimulus package that is a big win for American manufacturing technology.”
Fifty Percent Bonus Depreciation
Bonus depreciation allows businesses an extra one-year boost in how much they can deduct on capital expenditures like equipment that normally would depreciate over time. For example, under the old law, a new $100,000 machine could only provide a 2008 depreciation deduction of 14 percent of its costs, or $14,000. Under the new law signed today by President Bush, first-year depreciation can be $57,000: 50 percent of the $100,000 machine cost ($50,000) plus 14 percent regular depreciation on the remaining $50,000 property basis, or $7,000.
That means the new law creates a 43 percent greater tax deduction for a new 2008 machine purchase.
Expensing for Small Business
The increased Section 179 Expensing for Small Business more than doubles the amount that small businesses can write off for new or used equipment purchased during 2008, from $128,000 to $250,000. Additionally, the new law significantly increases the amount that can be purchased during the year and still receive the full benefits of the Section 179 expensing option – from the previous cap of $510,000 to $800,000.
“Beyond that, the increased Section 179 expensing allows the new 50 percent bonus depreciation to be taken on the remaining basis of the equipment if it’s new,” said Byrd. “These two provisions in the economic stimulus package are enormous benefits to our members and their customers.”
AMT-The Association For Manufacturing Technology (founded in 1902 as the National Machine Tool Builders’ Association) supports and promotes the U.S. machine tool industry. The association provides U.S. builders of manufacturing systems with the latest information on technical developments, trade and marketing opportunities, and economic issues. It also gathers and disseminates information about world markets, promotes its members’ products in those markets, and acts as a representative on manufacturing technology matters to governments and trade organizations throughout the world.
