Deciding whether to fit a new equipment purchase into a tight budget this year? A temporary change in tax law may convince IT managers to buy sooner rather than later.
In December, Congress approved a so-called 100% bonus depreciation tax benefit as part of the 2010 Tax Relief Act. The law was made retroactive to last September and will expire next year.
That means companies making IT purchases in 2011 could be eligible for a significant break. For example, a company that pays the top corporate tax rate of 35% and spends $100,000 on new equipment can reduce its taxes by $35,000, said Ernst & Young’s Greg Rosica in a recent ComputerWorld article.
Experts say that could be enough to convince businesses considering purchases next year to push those up to before January.