IT equipment depreciation legislation is popping up on Capitol Hill in the wake of the Sept. 11 terrorist attacks as a way to try to jump-start businesses hurt by the recent downturn in both the stock market and their own bottom lines.
Lawmakers have resorted to introducing standalone legislation after failing to get depreciation language inserted into the congressional economic stimulus package.
Watkinss bill, H.R. 3057, was referred for consideration to the House Ways and Means Committee. It follows on similar legislation that was introduced by Rep. Fred Upton, R-Mich., last Tuesday.
The bill changes the depreciation period businesses have to three years from the purchase of qualified IT equipment, instead of the current five years.
Such equipment would include wireless telecommunications products, advanced services and any network or network system equipment. Advanced services include equipment used in setting up Internet or other electronic communications access. Networks system equipment includes computer servers, hubs, bridges, switches and routers.
Uptons bill, unlike the Watkins legislation, would change the depreciation period to two years instead of three years.
It also shortens the depreciation recovery period for spectrum license fees from 15 years to seven years. Upton noted that experience in Germany and the UK shows that "excessive license fees have consequences for all stakeholders." Upton said this change would chip away at stock price pressure, bankruptcy risks and industry consolidation.
"Companies may want to upgrade, but have no incentive to do so because they have to keep the old equipment on the books," Upton said. "By making this simple change we can spur the buying of new equipment, and increase donations to charitable organizations in our communities."
Upton said the accelerated depreciation "will not only help business and consumers, but provide a real stimulus to the tech jobs sector of our economy."
Robert MacMillan, Newsbytes
