Equipment Purchase Tax Incentives Good Through December

Fall might be upon us, but there is still time this year to secure some important tax perks for purchasing or selling equipment. The Small Business Jobs and Credit Act of 2010, signed by President Obama last September, provides tax relief for foodservice operations and small businesses and assistance in gaining access to capital.

The legislation–part of the economic stimulus package ending this year–allows foodservice operations to write off up to $500,000 of equipment costs immediately, rather than recovering the entire cost over a multi-year depreciation schedule. The purchase must be completed during the ’11 tax year.

The bill also extends expensing limits to restaurant structural improvements, new construction and leasehold and retail improvements. As part of the proposed $500,000 limit, operators can expense $250,000 of those costs the year they incur them, through ’11. Previously, operators could recover these structural improvement costs only through a 39½-year depreciation schedule.

The legislation also includes incentives that make it easier to obtain Small Business Administration-backed loans.