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GREENSBORO, N.C. -- In an effort to save retailers money, Gilbarco Veeder-Root and Patriot Capital are combining two major tax benefits offered to the industry -- the Enhanced Section 179 deduction and Bonus Depreciation -- with a special finance lease program that delays all payments until 2009.
"This is the right time for retailers to upgrade their technology and capture these tax benefits," Richard Browne, vice president of marketing, North America, for Gilbarco, said in a released statement. "New Payment Card Industry requirements for accepting debit at the dispenser and POS end-of-life mandates from the networks will require retailers to upgrade or replace equipment anyway. In addition, investments driven by regulated Vapor Recovery and Leak Detection upgrades and the opportunity for new merchandising and color screen technologies, such as Applause Media System, make this an especially good time to invest in new technology."
The Enhanced Section 179 of the IRS Code allows retailers to expense the cost of eligible property, purchased and installed in 2008, explained Browne. Recent changes to the code have increased the maximum amount that retailers can write off in a single year to $250,000 of the equipment value acquired in 2008.
Under the Bonus Depreciation provision, a depreciation deduction of 50 percent of the cost of the property can be taken in the first year. There is no phase-out or income cap under this provision. This makes the deduction an attractive option for all retailers who want to update their sites or build new ones, explained Browne.
Eligible property includes:
-- Gasoline storage tanks and pumps at retail service stations.
-- Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum
-- Off-the-shelf computer software, including Gilbarco's Passport point of sale system.
Browne said taxpayers must elect to take the deduction on IRS Form 4562 in the year the property is first placed in service. He encourages retailers to consult with their tax adviser for full details.