FEBRUARY 23, 2009
**See comments about write offs and bonus depreciation in this ATA article about
the Stimulus Bill.
TAX PROVISIONS IN STIMULUS BILL
The $787 billion economic stimulus bill signed today by President Obama contains several tax provisions of specific interest to motor carriers. First is an extension of net operating loss carry backs for businesses that averaged less than $15 million in revenue over the last three years. For 2008, qualifying businesses are permitted to carry back losses for five years, compared to two years under prior law. Carriers that qualify for this provision may be able to amend past tax returns for profitable years to claim refunds of taxes to use as current operating funds. A much more generous net operating loss carry back provision, which would have applied
to all businesses, was deleted from the bill in conference. The package also extends for another year two current provisions that allow businesses to write off current expenditures for equipment up to $250,000 and to benefit from bonus depreciation on capital purchases. Carriers that are government contractors will be interested to know that the requirement for all levels of government to withhold three percent of contract payments to cover potential federal taxes has been moved back a year to 2012. More generally, some segments of the industry may be expected to benefit from the outlays for housing, loans and infrastructure contained in the package.
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