Watkins Introduces Legislation to Modernize Tax Rules to Stimulate ‘High Tech’ Economy
WASHINGTON – U.S. Rep. Wes Watkins, OK-03, has introduced legislation to modernize tax rules governing the tax treatment of technology equipment purchased by business enterprises.
Watkins’ bill, H.R. 3057, will reduce the depreciation recovery period to three years for certain technology equipment, such as computers and telecommunications equipment.
“The problem with the current depreciation rules is that technology equipment is usually buried in the graveyard before the end of the five year depreciation schedule currently allowed for most technology equipment purchases,” stated Watkins, a member of the powerful, tax-writing Ways and Means Committee of the U.S. House of Representatives.
“By reducing the write-off for high-tech equipment to three years, my bill provides enterprises with a depreciation schedule that is much more in line with the actual life of the high-tech properties,” he said.
When a business purchases expensive property or equipment, the business receives an annual deduction based on the reduction in value, or depreciation, of the property over a period of years, based on the government’s estimated life for that type of property. Under current tax rules, many technology purchases must be depreciated over a five-year schedule or longer.
Watkins bill reduces the depreciation schedules for a wide range of technology equipment, including computers, network system equipment, wireless telecommunications equipment, and advanced services equipment.
“My legislation will be an economic boon to jump start and expand high tech enterprises by spurring new technology purchases. Many companies will take advantage of modernized depreciation rules that more accurately reflect real-life experience with technology equipment,” Watkins predicted.