Your browser is out-of-date!

Update your browser to view this website correctly. Update my browser now

×

How the Economic Stimulus Package is Good for Small Businesses

In an article this morning in the New Yorks Times, Mickey Meece writes that the economic stimus legislation passed by Congress last week could have the most positive effect on small businesses, like those in our industry.

In an article this morning in the New Yorks Times, Mickey Meece writes that the economic stimus legislation passed by Congress last week could have the most positive effect on small businesses. Because most of the custom installation industry consists of small businesses, I decided the article was worth a closer read.

Meece writes that in addition to providing rebates to taxpayers, the $168 million measure also gives companies a 50-percent bonus deduction on new equipment that would normally depreciate over many years. And it increases to $250,000 from $128,000 in 2008 the limit on expenses that small businesses can deduct from annual income, with a total cap of $800,000.

I didn’t totally understand the implications for a custom installation business, so I asked one of our industry’s leading financial consultants to explain it to me. Darrell McComber, who will speak at this month’s CEDIA Management Conference, explained that, for years, Congress has provided this type of stimulant for businesses that need to invest in capital expenditures for personal property such as vehicles, display rooms, computer systems, furniture, etc. But this time, it’s a little different.

“What’s new with this new substantial increase,” McComber explained, “is that it encourages small businesses to act on their plans to improve their business right away, knowing that the accelerated tax deduction for depreciation will offset a substantial amount of the initial cost immediately in the year these assets are purchased. In some cases, the amount deductible can be 100 percent of the cost in the year of purchase. Depending on your tax situation, this can be a great incentive to go forward.”

So there you have it. Unfortunately McComber is not taking on new clients, but he has been known to answer questions from a certain influential trade magazine editor, if you care to send them along

Close