Tina Smith: “I want to bring to the Chairman's attention a matter that has arisen regarding the bonus depreciation provision that was…”

“I want to bring to the Chairman's attention a matter that has arisen regarding the bonus depreciation provision that was enacted last year in the Job Creation and Worker Assistance Act of 2002. When the House developed this provision, it wanted to ensure that the provision would stimulate the production of new, as opposed to 'used', equipment and other products. Thus, the additional depreciation deduction was restricted to those taxpayers who first 'used' the product. Inadvertently, the 'original use' requirement of this provision excluded many of the transactions in heavy equipment that the provision was intended to stimulate. Specifically, the provision inadvertently excluded multi-unit sales of equipment that were placed in service by manufacturers over a period of time and then sold to the ultimate purchaser of the equipment.”