Dreier Introduces Tech Depreciation Bill

March 13, 2003

WASHINGTON, DC - Congressman David Dreier (R-CA), Chairman of the House Rules Committee, introduced legislation last night that encourages immediate increases in capital spending for new and innovative technological products and services, boosting business investments and stimulating economic growth. The Technology Investment Incentive Act of 2003, H.R. 1232, implements this incentive by temporarily accelerating the depreciation and amortization schedules for specific technology products and activities purchased through September 11, 2004.

"Our economy needs a boost and it needs it now," Dreier said. "If we can provide an incentive for businesses to invest in new products, we will stimulate the kind of economic activity that will create jobs and enhance overall business expansion. My bill is geared toward the technology industry because it has proven itself to be a real engine of economic growth. This industry is currently hurting, but if brought back to life, it can lead the way toward a stronger, more vibrant economy."

Provisions in the bill are effective for assets purchased and placed into service between the date of enactment and September 11, 2004. The legislation would provide the following:

• A one year depreciation schedule for qualified technological equipment, currently a 5 year depreciation schedule, and all software purchases, currently a 3 year depreciation schedule;

• A three year depreciation schedule for wireless telecommunication equipment, advanced services equipment, and network or network system equipment; and,

• A three year amortization schedule for software development under research and experimental expenditures.

Technet CEO Rick White expressed his appreciation to Congressman Dreier for introducing the bill. "Chairman Dreier's bill brings the tax code into the 21st century by adjusting depreciation schedules to reflect how modern businesses actually use their depreciable assets. That's good news for the technology community, and good news for the economy as a whole."