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What's New

Jobs and Growth Tax Relief Reconciliation Act of 2003

On May 28th, 2003 President Bush officially signed the aforementioned Bill into Law providing incentives for business investment via capital acquisitions. Of particular importance to our prospective customers are the following provisions:

IRS Code Section 179 – Expensing Depreciable Business Assets

Under Code Section 179 of the Internal Revenue Code, businesses can now deduct up to $100,000 of the cost of the qualified property (defined as depreciable tangible personal property that is purchased for use in the active conduct of a trade or business) during the year that it is purchased (but not necessarily paid for) but placed in service after May 5, 2003 and on or before January 1, 2005.

This is an increase from $25,000.00 and also raised the phase-out threshold from $200,000 to $400,000. Additionally, “off the shelf” computer software was reclassified as qualifying property from non-qualifying property. JETEC’s IMS™ Software and software upgrades may qualify as “off the shelf computer software.

This provides businesses the opportunity to acquire computer controlled ink jet and laser marking equipment and “off the shelf” software that the company needs at substantial tax savings from the vendor of choice. The balance of the equipment and “off the shelf” software acquisition cost, if any, would be “capitalized” and “depreciated” during its remaining useful life.

Companies may elect not to take the depreciation bonus. This may be the right move for businesses that expect to be in an unusually low tax bracket in the year they are buying the equipment because, for example, business was slow. If your business expects to be in a higher tax bracket the year following the purchase, then waiving the special first-year depreciation may be beneficial.

There are some important exceptions to the qualification rules, as generally the case with most new tax laws. JETEC strongly encourages businesses to consult with their accountants and attorneys for the exact depreciation calculations, and to verify that the desired JETEC equipment meets the act’s requirements.


IRS Code Section 168K – Bonus Depreciation

Businesses can also utilize a 50% Bonus Depreciation allowance for NEW qualifying property that is acquired after May 5, 2003 and before January 1, 2005. This is an increase from 30% and is net of any Code Section 179 previously deducted.

Example: On December 1, 2003, a manufacturer of aerospace parts acquires and places into service a JETEC LMS Series™ Ink Jet Marking System, complete with 2D code printing and verification option, optional safety light curtain, hand held readers and host interface software. The total cost of the hardware and software purchased is $150,000.00. The following is the potential tax savings from this acquisition:

Cost of JETEC LMS Series™ Marking System:
Code Section 179 Allowance:
Reduced Basis for Depreciation:
Code Section 168K Allowance:
Reduced Basis for Depreciation:
Regular First Year Depreciation (5-Year MACRS):

$150,000.00
<100,000.00>
50,000.00
< 25,000.00>
25,000.00
< 5,000.00>

Upon the application of the aforementioned IRS Code Sections 179 and 168K, the aerospace manufacturing company would be able to deduct $130,000 in 2003 depreciation.

Your Company May Elect to Utilize These Tax Savings to LEASE EQUIPMENT vs. PURCHASE

JETEC Corporation, through its partnership with American Packaging Capital, Inc. can structure an Equipment Lease with either a $1.00 or another "pre-determined fixed amount" residual to qualify the transaction for both the Code Section 179 and Code Section 168K benefits. The potential tax savings for acquiring JETEC's Industrial Ink Jet or Laser Marking Systems under this Bill are substantial. For more information contact your corporate finance representative or your JETEC Corporate Sales Executive.

JETEC Corporation has pioneered non-contact, direct marking technology for a wide range of industries. JETEC specializes in the design and manufacture of computer-controlled, interactive product making systems for bar and 2D coding, custom software, and international product identification. JETEC's approach to product marking systems offers an unprecedented reduction in manufacturing costs and cycle times while improving product quality. JETEC's customer have  utilized laser and inkjet marking solutions in industries such as printed circuit board manufacturing, semiconductor, electronics, automotive, medical, aerospace, appliance and industrial manufacturing. To learn more about JETEC Corporation's products, please

Contact JETEC:
info@jetec.com

Tel: (949) 477-6161
Fax: (949) 477-6167

 


 

 


 

 
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