Economic stimulus deal spurs tech

President Bush is expected to sign the $168 billion economic stimulus bill this week that could save businesses tens of millions of dollars this year on the purchase of IT equipment. The legislation, intended to give a boost to the ailing economy, includes a provision that accelerates the first-year depreciation of capital equipment bought during 2008 to 50 percent of the purchase price. And that includes technology products. Another provision, aimed at small and midsize businesses, increases the amount of capital equipment purchases that can be deducted on 2008 corporate tax returns from about $125,000 to $250,000.

"It's a tremendous incentive for people to buy now-it's as if someone put a for-sale sign on every asset," said Tom Ochsenschlager, vice president of taxation at the American Institute of Certified Public Accountants in New York. Ochsenschlager told ComputerWorld that tax payments are like saying,"'You've got to do it now. You've got to stimulate the economy now.'"

There are plenty of ways the stimulus package will help businesses. Bartlett Cleland, vice president at the Information Technology Association of America in Arlington, Va., said the tax breaks may prompt many smaller companies to replace aging IT equipment. "Small businesses rely on IT a lot heavier than some big companies do," he said. "Arguably, the encouragement to purchase would be greater in the small business situation."

For more on the economic stimulus plan:
- See this ComputerWorld article