Sales Tip: Tax Incentive Makes Sense For Equipment Buyers

There are another ten months to buy (or sell) equipment in 2011, so don’t forget about the tax perks for purchasing equipment during this calendar year. The Small Business Jobs and Credit Act of 2010, signed by President Obama last September, provides tax relief for foodservice operations and small businesses and assistance in gaining access to capital.

The legislation allows foodservice operations to write off up to $500,000 of equipment costs immediately, rather than recovering the entire cost over a multi-year depreciation schedule. The purchase must be completed during the ’11 tax year.

The bill also extends expensing limits to restaurant structural improvements, new construction, and leasehold and retail improvements. As part of the proposed $500,000 limit, operators can expense $250,000 of those costs the year they incur them, through ’11. Previously, operators could recover these costs only through a 39½-year depreciation schedule.

The legislation also has incentives which make it easier to obtain Small Business Administration-backed loans. More information is here.  “””