by Brianna Crandall — April 11, 2018 — The Security Industry Association (SIA) recently released a fact sheet, “New Tax Incentives for Security and Fire Protection Systems,” to explain how new US tax reforms allow many businesses to deduct the full cost of security and fire protection systems as an expense for the tax year in which they are placed in service.
Under the new law, businesses may eliminate the capitalization requirement of depreciating the cost of a security or fire protection system over a period of up to 39 years, depending on applicable factors.
SIA CEO Don Erickson remarked:
Since 2003, SIA has advocated for increased business tax expensing for security and fire protection systems. We have been involved in supporting the related provisions in tax reform that will meet this goal. The SIA fact sheet provides a good summary to security suppliers and integrators of new tax policies under which small- and medium-sized businesses can deduct up to $1 million in qualifying expenses, designed to spur investments in the economy.
On December 22, 2017, President Donald Trump signed the Tax Cuts and Jobs Act (P.L. 115-97) into law, creating the new investment incentives, which he hailed as a powerful economic stimulus, beginning in the year 2018.
In addition to the new benefit for small- and medium-sized businesses, the new law provides for the accelerated, or “bonus,” depreciation of certain security-related investments for all businesses for only a limited number of years before phasing them out, essentially returning bonus depreciation rules to their 2017 parameters.
SIA recommends businesses check with their tax advisors to see how these new deductions may benefit them. SIA does not provide tax or legal advice.
The SIA fact sheet, “New Tax Incentives for Security and Fire Protection Systems,” is available for download from the organization’s Web site.