House Bill Would Resurrect Tax Break That Helped Spark Truck Sales in 2011

A bill that would extend a tax break credited with helping spur trucks sales last year has been introduced in the U.S. House of Representatives.

The legislation by Rep. Patrick Tiberi (R-Ohio) and a bipartisan group of co-sponsors would allow businesses to write off 100% of the price of equipment purchased in 2012, as they were allowed to do during 2011.

For trucking fleets, that bonus depreciation could be used not only for buying trucks and trailers but also for purchases ranging from new computers to dispatcher equipment.

“I’ve talked to small-business owners from across Ohio who have explained that the bonus depreciation is the single, largest factor for businesses considering expansion this year,” said Tiberi, who introduced the bill on March 13.

Normally, businesses are required to spread depreciation write-offs over several years.

However, the bonus depreciation tax break was adopted in late 2010 and ran through 2011 in an effort to boost the manufacturing sector during the recession.

“Allowing job creators to use these tools for capital reinvestment is a common-sense way to encourage job creation and promote business expansion,” Tiberi said in a statement to Transport Topics. “We’re working to build support for this measure and encourage those who believe it’s good for business to contact their congressmen.”

The measure was referred to the House Committee on Ways and Means. Tiberi is chairman of its Subcommittee on Select Revenue Measures, which has jurisdiction over federal tax policy.

Extending the bonus depreciation tax break would help truck makers and truck buyers alike, said Bailey Wood, spokesman for the American Truck Dealers division of the National Automobile Dealers Association.

“Bonus depreciation is a proven way to generate economic activity,” Wood said. “That’s why there’s broad bipartisan support for it.”

Ann Wilson, vice president of government affairs for the Motor & Equipment Manufacturers Association, said her group is pleased about the bill.

“We think it’s necessary, and we’d like to see it approved,” she said.

Sales of heavy-duty trucks were up 78% in December over the same month in 2010, according to data supplied by Wards­Auto.com. For all of 2011, truck sales were up 60%, compared with sales in 2010.

American Trucking Associations also is among dozens of trade and manufacturing groups that have asked Congress to extend the tax break through 2012.

This is the second time backers have tried to get bonus depreciation passed for 2012. Earlier this year, a bill by Ways and Means Committee Chairman Dave Camp (R-Mich.) was approved by the House and attached to legislation extending the payroll tax cut that went to conference with the Senate.

In conference, however, bonus depreciation was dropped.

In the Senate, a bonus depreciation extension was part of an economic stimulus bill introduced by Sen. Chris Coons (D-Del.). Like Tiberi’s House proposal, the Coons bill has bipartisan support.

In addition, President Obama included the tax break in his fiscal 2013 budget proposal.

The U.S. Treasury estimated that the tax break is so popular it will cost taxpayers about $55 billion for fiscal 2011. Most of that money, officials said, will be recouped in later years because businesses taking the 100% depreciation write-off in one year would not have a write-off in subsequent years.