As March comes to a close, we’re seeing the contents of a major economic stimulus package signed into law, unpacked and interpreted by businesses throughout the United States.
COVID-19 Stimulus Law “Phase 3”
Phase 3 of the Coronavirus assistance package introduces several significant opportunities to the Security Industry, which should benefit both installing dealers and facility owners/managers.
Installation and upgrades to security and life-safety systems qualify. This available “bonus depreciation” for Qualified Improvement Property QIP is 100 percent of costs for each tax year through 2022, which then phases out by 2027. Beyond the Section 179 expensing for these costs made available to small and medium sized businesses through the Tax Cuts and Jobs Act, this change means these improvements can now be written off regardless of business size.
Bottom Line: What does this mean to Dealers and Customers?
These changes enable businesses to write off costs associated with interior improvements to a facility, instead of having to depreciate those improvements over the 39-year life of a building.
SIA also notes that the provision corrects an error in the Tax Cuts and Jobs Act, by “not only increasing companies’ access to cash flow by allowing them to amend returns from prior years, but also incentivizing improvements as the country recovers from the COVID-19 emergency.”
Customers can use the 100% tax deduction of the cost of a physical security system, and Dealers can take this opportunity to help their customers get the updates that their systems need.
Keri Systems does not offer or recommend tax advisement of any type whatsoever. We only forward this openly published information, as recommended reading for general business planning and sales direction.