Bonus Depreciation

Last Updated: January 13, 2021

The Issue

Under bonus depreciation, companies are allowed to tack an extra 50% on top of the normal write-offs they are allowed for certain capital investments. The tax break was put into place two separate times by the George W. Bush administration, after the 9/11 attacks and as the economy floundered in 2008. Bonus depreciation was then extended under President Obama’s administration. The tax extenders package that became law at the end of 2015 extended bonus depreciation for an additional five years. For property placed in service in 2015, 2016 or 2017, the bonus depreciation percentage is 50%; 40% in 2018; and 30% in 2019.

Retail Impact

Bonus depreciation helps save convenience retailers thousands of dollars a year by allowing additional expensing of capital investments. This is money store operators are able to reinvest in their businesses and communities.

NACS Position

NACS supported the five-year extension of bonus depreciation and has supported previous efforts to make this tax provision permanent.