48th Annual ASIS Seminar and Exhibit.
The following is a summary of the benefits of this new law that will make it easier for companies to take a tax deduction for the purchase of security equipment.
On Saturday, March 09, 2002, President Bush signed H.R. 3090, the "Job Creation and Worker Assistance Act of 2002." The Act includes a 30% bonus depreciation provision that will make the purchase of alarm and security equipment more attractive.
The signed legislation will allow businesses that purchase equipment (including alarm/security systems) to take an accelerated depreciation write-off. Under the provision, businesses would be allowed to write-off an additional 30% of the adjusted basis in the year the equipment is purchased.
Normally, businesses purchasing 20-year or less life equipment, depreciate that equipment under the 200% (alarm/security equipment) or 150% declining balance method. Under the provisions of the Job Creation and Workers Assistance Act of 2002, a bonus amount of 30% of the cost can be taken in the first year. The remaining adjusted basis in the property would be depreciated starting in the year in which the item is purchased. Generally, alarm/security equipment is depreciated over 5 years utilizing the 200% declining balance method.
To qualify, the equipment must be purchased between September 11, 2001 and before September 11, 2004, and it must be placed in service before January 1, 2005.
Any equipment purchased under the bonus depreciation rules would not be included for the purpose of calculating the alternative minimum tax.
The 30% bonus depreciation rule may be utilized on the equipment that an alarm company purchases and leases to their customers.
Of course, you should always speak with an expert concerning all tax matters, North American Video provides this data for informational purposes only and cannot guarantee the deductibility of any product purchase.
For a detailed explanation of the provisions, visit http://www.house.gov/jct/x-12-02.pdf