Section 179 expansion allows businesses to immediately deduct up to $1 million in nonresidential HVAC equipment
Here’s some great – and potentially very profitable – news for our customers. The Tax Cuts and Jobs Act that was signed into law in December of 2017 contains a hidden jewel for the HVAC industry: the expansion of Section 179. This expansion allows businesses to immediately deduct up to $1 million in qualifying nonresidential HVAC equipment purchases for the 2018 tax year.
Created in 1958, Section 179 allows companies to take depreciation deductions for certain assets in one year rather than depreciating those items over the useful life of the product – historically, over a 39-year period for HVAC equipment. The tax reform bill incorporates HVAC products in Section 179 for the first time, and offers important savings for both small and large projects.
This change to immediate expensing provides a great opportunity for building owners to save money when making new purchases…often enough to influence purchase vs. repair decisions, providing the necessary motivation to replace aging systems with new and more efficient equipment. Reps and contractors should be prepared to educate decision-makers about this little-known tax advantage.
HARDI (Heating, Air-Conditioning & Refrigeration Distributors International) has created an infographic that describes the benefits of the Section 179 expansion in easy-to-understand terms and gives a specific purchase example. To view HARDI’s Section 179 HVAC Expensing information, click here.