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Tell Congress to Extend 100% Bonus Depreciation with the ALIGN Act (H.R.2406/S.1117)
A group of U.S. House and Senate lawmakers recently introduced the Accelerate Long-term Investment Growth Now (ALIGN) Act (H.R.2406/S.1117), legislation that would permanently extend the 100% bonus depreciation tax provision for businesses. Bonus depreciation is an important tax savings tool for LBM dealers that allows businesses to take an immediate deduction on the cost of eligible business property in the first year it’s placed in service. This lowers a company’s tax liability because it reduces their taxable income.

In 2017, the Tax Cuts and Jobs Act (TCJA) enacted 100% bonus depreciation, allowing businesses to immediately write-off the full cost of any eligible property (such as computers, vehicles, forklifts and heavy machinery) acquired and placed in service before January 1, 2023. However, beginning this year, 100% bonus depreciation is being phased-out by 20% each year until it expires in 2027. Businesses are now only able to deduct 80% of their capital investments for 2023, which will fall to 60% in 2024, 40% in 2025, and then 20% in 2026. By 2027, there will be no bonus depreciation allowed for these investments at all. Limiting this critical deduction for LBM dealers will reduce investment, resulting in fewer jobs, lower wages, and slower economic growth.

The ALIGN Act would make 100% bonus depreciation permanent, canceling the phasedown in bonus depreciation that began this year. NLBMDA members are strongly encouraged to contact their elected officials in Congress and ask them to support and cosponsor the ALIGN Act. 

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