Update: Forbes has reported the tax extenders act, including Section 179, has been signed by the President on December 19, 2014
2014 has seen great improvements in business for the economy—and in turn, for gas station owners, jobbers and dealers. The U.S. Energy Information Administration noted that 2014 is the second straight year that the consumption of motor fuel has increased – reversing a decade-long trend. With fuel margins as strong as they have been in the past several years, jobbers and dealers have seen profits spiraling up – with the promise of even more revenue strength going forward.
As you consider how options to maximize your tax efficiency, Congress and President Obama have given you an incentive to consider reinvesting into your business right now. The “Tax Increase Prevention Act of 2014” – which has passed both houses of Congress and is awaiting the President’s signature at this writing – is giving business owners Section 179 tax relief on the costs of equipment purchases. At the time of writing, the legislation would apply only to 2014 purchases and not, as originally proposed, to 2015 purchases. Update: the legislation signed by the President applies is reported to apply only to 2014 tax year.
A mirror of the Small Business Jobs Act of 2010, which provided temporary tax benefits to improvement-minded businesses that expired at the end of 2013 – the new bill allows for immediate expensing of most equipment purchases as well as an extension of 50% bonus depreciation—all retroactive to January 1 of this year.
This means that any equipment, software and qualified real property you purchase before Dec. 31—totaling up to $500,000, can likely be completely written off, with purchases of up to $2 million receiving some protection from taxation. (This blog has a brief summary of the history of Section 179 Small Business Tax Credit prior to 2014—click here)
Some of the ways you can take advantage of the 2014 Section 179 renewal include:
Renovations and innovation: Is it time to modernize your equipment? With big box fuel retailers, jobbers and dealers trying to consistently outdo each other with updates to their technologies both at the pump and in store, now is a great time to make sure you’re keeping pace. And with the new EuroPay, MasterCard and Visa (EMV) payment standards required at point of sale by October of 2015, it doesn’t pay to wait to upgrade your equipment to accept the new “EMC chip and pin cards.”
Upgrading your lighting to the latest LED products is a great way to make an energy efficient change right now that delivers an ROI due to the energy savings they provide. Companies like Acuity Brands have helped our clients modernize their lighting fixtures and improve their site image at a very reasonable cost.
One other thought—if you lease, rather than own, your building, you can even write off limited structural changes – things like interior walls and doors – under the new Section 179 provisions.
Accessing this opportunity now to realize tax savings next April can certainly be a challenge. Finance companies like Patriot Capital Corporation can help jobbers and dealers access funds in order to make improvements now—helping you leverage and tap your newly acquired equipment and property as the only collateral in the transaction, and gaining you efficiencies, lower operating costs and tax relief that will benefit you in 2014—and beyond.
For further information regarding Section 179’s impact on convenience stores and fueling equipment, or about financing options for gas pumps, point of sale (POS), LED lighting and other capital equipment for C-stores, please contact your regional Patriot Capital Corp. sales manager or Richard Browne, Vice-President Marketing, Patriot Capital Corporation, at 877-527-0383 or email email@example.com
Patriot Capital specializes in enabling entrepreneurs to succeed by providing equipment financing to retailers in the convenience store and retail petroleum fueling industries. Working with our customers to enable them to optimize their capital structures, Patriot Capital is the leading provider of capital equipment financing and leasing to NACS (National Association of Convenience Stores) and SIGMA (Society of Independent Gasoline Marketers of America) members. For additional information, please visit www.patriotcapitalcorp.com. Patriot Capital Corporation is headquartered in Atlanta, Georgia. Follow Patriot Capital on Twitter @PatriotCapital