The Changing Tides Section 179: Exploring the equipment leasing companies 2023 tax reform’s Impact
Analysing Positive and Negative Consequences for equipment leasing companies 2023 tax reform
The landscape of equipment leasing companies is undergoing significant changes in Deduction limits, Bonus depreciation, and the advantages and Consequences of leasing equipment under Section 179 with the recent tax reform implemented in 2023.
How to Leverage 100 Percent Expensing and Other Tax Changes for Your Equipment Leasing Business in 2023, by considering your cash-flows and tax circumstances, is the question that holds significance.
Deduction limits Under Section 179 for long-term financial
you can write off the entire cost of qualifying equipment up to the deduction limit on new and used equipment. ^3
Positive impacts
Increased demand for equipment leasing. lowers the corporate tax rate from 35% to 21%. This will make it more profitable for businesses to invest in new equipment, leading to increased demand for equipment leasing.
Improved access to capital. The new tax law allows businesses to deduct interest payments on equipment leases. This will make it easier for businesses to obtain financing for equipment purchases, increasing the availability of equipment leasing options. ^2
Enhanced Depreciation Benefits: This change will encourage companies to invest in new equipment, boosting demand for leasing services. ^1
Negative impacts
Increased compliance costs. New reporting requirements for equipment leasing companies will increase the cost of compliance for these companies.
Reduced tax benefits for foreign leasing. The new tax law limits the ability of businesses to deduct interest payments on foreign equipment leases. This will make foreign leasing less attractive to businesses, which could reduce the demand for equipment leasing from foreign customers.
Increased competition from banks. The new law allows banks to deduct interest payments on equipment leases. This could lead to increased competition from banks in the equipment leasing market and put pressure on equipment leasing companies’ margins.
APA-style citations
1.
Burton, D., & Levin-Nussbaum, A. (2018). The impact of tax reform: What equipment leasing companies need to know. https://www.taxequitytimes.com/wp-content/uploads/sites/15/2018/02/TaxReform_Article-for-ELFA_02162018.pdf
2.
Beacon Funding Corporation. (2023). Tax benefits of leasing equipment in 2023. https://www.beaconfunding.com/blog/article/tax-benefits-of-equipment-leasing-in-2023
3.
AgDirect, powered by Farm Credit, is among the leading ag equipment financing options in the nation.
Section 179 Update: What you need to Know in 2023
