Members of the U.S. Congress went home at the end of 2013 without extending several key tax incentives, two of which may have an impact on your warehousing facility:
- One incentive, known as the capital expenditure deduction, allows businesses to immediately expense up to $500,000 of investments in qualified equipment. This deduction was not applicable to taxpayers purchasing more than $2 million of property in the same year. These investment thresholds, however, have now dropped to $25,000 and $200,000 respectively due to Congressional inaction to extend the 2013 levels. The purpose of this deduction is to incentivize business purchasing and expansion.
- Another relevant incentive to expire at the end of 2013 was the federal energy tax deduction. This deduction offset some of the costs of qualifying energy-efficient improvements to commercial buildings by allowing taxpayers to take an immediate expense for improvements that reduce the total annual energy and power costs by 50 percent. Qualifying improvements include interior lighting systems, heating, cooling, ventilation, and hot water systems.
Fortunately, even though Congress failed to act before leaving for the holiday work period, it is entirely possible that it may address these issues in 2014, perhaps in the first few months. That is why it is important that you contact your representative and senators today and urge them to extend the federal energy tax deduction, restore the 2013 levels applied to the capital expenditure deduction, and apply both retroactively to ensure businesses, such as warehouses, are not negatively impacted.
Click on this link to send your letter today: Issue Alert – Tell Congress to Extend Key Tax Incentives