A tax rule means operators nationwide can save money on purchases of qualifying equipment and vehicles, such as this Krystal Town Car stretch limousine, by Dec. 31, 2011.
BREA, Calif. — A tax rule passed last December and set to expire Dec. 31 would allow any operator buying a commercial vehicle to deduct the entire expense on 2011 business taxes.
Coachbuilders and vehicle vendors are actively promoting and publicizing “Section 179 Tax Incentive” in coming weeks since it can spur sales while helping chauffeured transportation operators save thousands of dollars on fleet vehicle purchases.
The industry’s leading coachbuilder, Krystal Enterprises of Brea, Calif., already has seen an increase in demand this quarter for new vehicle purchases because of the tax incentive, said Robb Bennett, vice president of Krystal Enterprises. The manufacturer has seen an uptick in “five to 11 car deals,” Bennett told LCT.
Krystal is seeing strong orders for stretch limousines and mini-buses, including 50 deposits so far from customers ordering Krystal Lincoln MKT Town Car stretch limousine models due out next year, Bennett said.
According to www.Section179.org:. Its purpose is to provide financial support to businesses that use the deduction to buy qualified equipment. The U.S. government created the provision to encourage businesses to purchase needed equipment and re-invest in themselves. Section 179 allows businesses to deduct 100% of the purchase price of qualifying equipment (up to $500,000), which includes display products, when purchased, financed or leased during the tax year, instead of depreciating it over time.
Bennett stated that vehicles qualifying for the depreciation incentive must be for active commercial use on the road, and purchased by a business that is generating revenue. All vehicles/equipment must be bought by Dec. 31, 2011.
Operators and business owners should check with a qualified tax adviser or accountant to determine how the tax rule specifically applies to their businesses and equipment purchases.
Trade Show Displays
Section 179 also allows a 100% tax deduction on trade show booths. Click here to purchase space exhibit space for the upcoming 2012 ILCT Show at the MGM Grand in Las Vegas, Feb. 13-25. All costs connected to a booth (display materials, promotional items, etc.) must be paid for by Dec. 31, 2011 in order to qualify for the tax deduction.
-- Martin Romjue, LCT editor