Jan. 27 (Bloomberg) -- President Barack Obama will propose extending through 2010 a temporary tax incentive that encourages businesses to accelerate purchases of equipment, an administration official said. The president will call for renewal of the 50 percent “bonus depreciation” in his State of the Union address tonight, said the official, who spoke on condition of anonymity.
Extending the break, which expired Dec. 31, would save companies that make qualified purchases of equipment such as tractors, wind turbines, solar panels and computers a total of $38 billion over this year and next, the official said.
Bonus depreciation was a tax element of the $787 billion economic recovery legislation adopted last February. It also has been a feature of earlier economic stimulus measures, including one adopted in 2003 under President George W. Bush.
While companies will realize tax savings in the year they purchase qualified equipment, they’ll pay higher taxes in subsequent years when the property is fully depreciated. ~~~~ This is showing up in the computer industry for sure...chips sales are up...
