Have you looked at your paycheck lately? Pull it out again and look at your net pay. With the recent tax law changes, the federal government is letting me keep more of my money. Not much more, but I think I can go out to eat a couple more times each month. Congress and President Bush recently gave industry the same nice midyear gift they gave individuals.

A recent article by Tribune Media Services describes the changes in Section 179 of the federal tax code. This section addresses how much a company can expense in “qualifying property” during the first year the property is put in service. Previously, that amount had been only $25,000—a nice amount for you and I personally, but not much when it comes to corporate investment. However, that’s changed.

Under the new tax-cut package, companies can now write off as much as $100,000 during the first year. There is a caveat. Expensing equipment in the year purchased phases out businesses that spend more than $400,000 on “qualifying property” during any given year. Those companies spending more than the allotted amount don’t forfeit the ability to expense equipment; they must spread it out over a longer period of time. Bush and Congress aimed these tax reforms squarely at benefiting small and midsized companies, which are the backbone of our economy. The tax cuts contain other improved equipment depreciation benefits as well.

So what constitutes “qualifying property?” According to the tax analysts, it includes almost anything used for business purposes—office equipment and furniture, certain vehicles, computers and machinery. That’s right—machinery. For nearly 10 years, I have watched lobbyists work on Congress to improve capital equipment depreciation. Now, it seems that the federal lawmakers have gotten the message. Why? As the vice president of a manufacturing-related trade association recently told me, “Who cares what caused Congress to finally take manufacturing seriously? At least they are finally listening.”

This tax break is great news for everyone who reads Quality magazine, as well as for those who supply our readers with products. We have long heard from readers about “pent-up” demand to spend. Suppliers, many of which are found in these pages, have heard the same. Both the suppliers and I believe you, but now is the chance for you to purchase that equipment or software you have been holding off on. Have you been waiting for the opportunity to buy that new comparator? A modestly priced CMM? Enterprisewide software? Maybe you can’t afford new equipment? That’s no problem because the new legislation applies to used equipment as well.

In the midst of an economy where the manufacturing numbers are static, now is the time to act. Manufacturers who wait until the economy has actually recovered will be too late—their competitors will beat them to the market share. So, go out and get a copy of the revised Section 179. Get that equipment supplier’s proposal that has been sitting on your desk for months. Put both of them in front of your boss and make the call you both have been waiting to make.

Will the changes in Section 179 affect your plans for investing in equipment and software? Let me know at williamst@bnp.com.