Nelson Equipment Announcement Page

Nelson Equipment Company, Inc.

Economic Stimulus Bill has Incentives for Equipment Purchases

Although the business incentives have been overshadowed in the news by the individual tax rebates, the business tax breaks are very valuable. The Economic Stimulus Bill IR-2008-22 may just be the incentive to get your long awaited project off the ground This Bill can be broken down into two primary areas:

Expensing election for Small Business

The new law doubles the amount of equipment that can be expensed in the year of purchase. For equipment purchased (and placed in service) for tax years beginning in 2008, 100% of the cost of the equipment can be written off for tax purposes, UP TO $250,000. This applies only in 2008. If a business purchases more than $1,050,000 in equipment in 2008, this expensing election is not available, but see bonus depreciation below. Remember, the equipment has to be placed in service in 2008 to qualify.

Temporary bonus depreciation

Congress has used bonus depreciation in the past to encourage business investment (post September 11). The new law allows qualifying taxpayers 50% of the cost of qualifying equipment as first year bonus depreciation. As with the expensing election above, this provision is for equipment placed in service in 2008. The 50% bonus depreciation can be taken even if you exceed the $1,050,000 of equipment purchased in 2008, so even larger businesses can take advantage of this provision. Also, bonus depreciation is only available for new equipment (not used). Remember, this bonus depreciation is on top of regular depreciation claimed for tax purposes.

TO SEE EXAMPLES HOW YOU CAN BENEFIT FROM THE TAX INCENTIVE,
CLICK HERE.

NOTE: As always, consult your tax advisor (and encourage your customers do the same) to make sure these benefits will be applicable to your particular situation.

WHY LEASING MAKES SENSE

Why Do 80% of American Corporations Lease Equipment? It's simple. Company owners and managers realize that the real value of equipment is in the use of that equipment, not necessarily in owning it. Best of all, by leasing instead of buying outright or borrowing money, a company's cash and equity isn't tied up in equipment, but can be used in better ways to generate profits.

An equipment lease is an equipment financing option in which a lease company retains ownership of the equipment in exchange for monthly rental payments. Purchasing the equipment at the end of the lease is always an option. For a low down payment and fixed monthly payments, a company gets the use of the equipment, without large initial expenditures. Simply put, leasing makes sense.

Tax Opportunities - Lease payments may be considered pretax dollars and fully deductible operating expenses. Leasing may eliminate the need for complicated depreciation schedules and could accelerate tax benefits. You also may avoid the Alternative Minimum Tax by paying for the equipment out of current, untaxed income instead of from pretaxed profits. The more profitable the company, the greater advantage of a lease.

FINANCIAL REPORTING
Leased equipment is its own collateral

Off Balance Sheet Financing: A capital purchase must be listed as an asset and a corresponding liability. As year pass, depreciation and interest expenses have to be accounted for. Leased equipment is not required to be capitalized in financial statements. Leased equipment is footnoted, so a company's financial ratios and measurements improve. Leased equipment does not create a liability, so the company appears less leveraged.

Increased Return on Assets: Leasing doesn't increase a lessee's asset base, which allows a company to report a higher return on assets.

Improved Cash Forecasting: Leasing payments are locked in for the term, eliminating uncertainties regarding the future cost of equipment.

AVOIDS OBSOLESENCE - During or at the end of a lease, you have the option to upgrade to a more technologically advanced product. This helps keep your business competitive. If you are going to upgrade, a simple phone call and the remaining principle balance of the old equipment is added to a new lease.

Call us Toll Free at 800-523-6199 to speak with a friendly sales representative about our leasing options

Solutions for Your Material Handling Needs

Nelson Equipment Company will provide you with the ultimate solutions for your material handling needs. As an authorized distributor for Hytrol Conveyor Company, Nelson Equipment Company can utilize equipment available for 24-Hour Shipment from the Hytrol Jonesboro Stockyard.