DC Velocity - September 2018

BY TOBY GOOLEY, CONTRIBUTING EDITOR

FORKLIFTS
Material Handling

IF YOU’VE BEEN KEEPING UP WITH GOINGS-ON IN Washington, then you’re aware of policy changes implemented earlier this year that are affecting U.S. businesses. What you might not know is that two in particular— changes in tax law under the Tax Cuts and Jobs Act of 2017, and the imposition of tariffs on a wide range of products— could have a direct impact on companies that buy, sell, or manufacture forklift trucks and parts in the United States.

Here’s a look at what the federal government’s actions on taxes and trade could mean for forklift buyers and suppliers. This article is intended to provide general information; be sure to consult your tax and customs-compliance advisers for guidance on how these changes will affect your company.

FINDING TREASURE IN TAXES

By all accounts, 2018 is a good year to invest in capital
equipment, including forklifts. The Tax Cuts and Jobs Act
of 2017, passed by Congress in late December, included pro-
visions that make it advantageous to buy equipment now.

One such provision
allows many compa-
nies to write off capital equipment more quickly than in the
past. Specifically, revisions to Section 179 of U.S. tax law
allow qualified businesses to deduct more of the cost of new
and used equipment, up to a specified limit, and fully deduct
it in the same year the property is placed in service, rather
than having to depreciate it over a number of years, explains
Susan Rice, program manager for Raymond Leasing, a
division of forklift maker The Raymond Corp. “Section 179
targets small to medium profitable corporations—you have
to be profitable to get the benefit,” she notes.

The new law also doubled the maximum deduction allowed under Section 179 to $1 million from $500,000 per year. In addition, it increased the phase-out threshold (the point after which the tax deduction is gradually reduced, or “phased out”) for equipment that is eligible for Section 179 to $2.5 million from $2 million. (For more information, see forklift dealer Brodie ToyotaLift’s article about Section 179 deductions at https://brodietoyotalift.com/sec- tion-179-forklift-tax-deductions/. The post includes links to a tax-savings calculator published by Section179.org, an organization that promotes the provision’s benefits for businesses.)