by clicking the arrows at the side of the page, or by using the toolbar.
by clicking anywhere on the page.
by dragging the page around when zoomed in.
by clicking anywhere on the page when zoomed in.
web sites or send emails by clicking on hyperlinks.
Email this page to a friend
Search this issue
Index - jump to page or section
Archive - view past issues
FLEXO Magazine : June 2008
FTA TODAY z - VI ... D: III :z: VI - .... III :) a. ESP: A Bonus & A Break... C ongratulations! You-one of America's flexographic printers and converters- qualify for an economic stimulus package (ESP). And, I'm not referring to the one tied to your personal income tax return. No check is in the mail. No direct deposit has been made to your bank account. This tax incentive is available, albeit for a limited time, but it will require both careful budgeting and astute planning in order for you to make it happen. Savings afforded are, or will be considerable, so much so, that I am actually a bit embarrassed that we haven't been talking this up for months and months. True, we've heard casual mentions, but once the calculations are put in front of you, the potential savings start to speak for themselves and a little voice starts to echo in your ears. Those whispers lead to one, and only one conclusion. If you've ever been seriously thinking about committing to a capital equipment expenditure plan, now is probably the best possible moment to do it. Time is short. The window of opportunity is clos- ing. You must act fast. To qualify for the incentive, the equipment must have a "placed- in-service" date that falls between today, and this coming Dec.31. The clock is ticking down, starting at just about 180 days. LETTER OF LAW Don't be put off by the tight schedule. Instead, take a little time-and make it as soon as possible-to read up on the provisions of House Resolution 5140: The Economic Stimulus Act of 2008. This piece of legislation, passed by the full Senate and House of Representatives, and then signed into law by the President in February, really could ease the burden of new equipment purchases and dramatically speed up return on investment recoup- ment time. What makes overall saving of approximately 40 percent possible? Specific clauses of Section 179 of the Internal Revenues Service Code. Key phrases to pay close attention to are "expensing," and "bonus depreciation." What are called "business provisions" in the legislation effectively extend printers/ converters a 50 percent bonus depreciation on their investments on new equipment purchased after Dec. 31,2007; provided, of course, that it is fully operational before Jan. 1,2009. Today's law also comes very close to doubling the 2008 limit on capital investment costs that can be expensed. The ceiling, in fact, has been raised from $128,000 to $250,000 for companies that purchase less than $800,000 in capital assets this year. CRUNCHING NUMBERS Grabbing a calculator, my reading of the situation, given a few different scenarios, comes down to the following: Scenario 1: A printer making a $250,000 capital equipment expenditure at an effec- tive tax rate of 40 percent, can take a first-year bonus depreciation of 50 percent on amounts not used in the first year of depreciation, plus 7 percent regular depreciation on amounts not used in the first year. The full $250,000 can be expensed in the new small business provision. Net effect of the tax incentive is akin to the actual price be- ing $150,000, representing a savings of $100,000. Scenario 2: With the same formulas and percentages applying, a printer who spends $100,000, can realize a savings of $40,000 and bring hisfher total cash outlay down to $60,000. Scenario 3: A printer who spends $60,000 and takes advantage of the current tax code and small business clause, can apply the same formula resulting in 40 percent savings ($24,000) and thereby bring hisfher cost down to $36,000. With numbers like those on the table, chances are that any of you who have been looking at new equipment and conducting your own costsfbenefits analysis, are al- ready hearing that little voice whispering in your ear. Help is :::a ;:: ;;:. The question to you: "Can my com- -'- - JUNE 2008 www.flexography.org FLEXO Roxanne Baker, Cryovac Sealed Air Mark Cisternino, Flexographic Technical Association Larry Claton, Aquaflex Greg Collins, C- P Flexible Packaging Michael Ferrari, Procter 8( Gamble Gary Hilliard, Hood Packaging Michael Impastato, Flint Group Jean Jackson, Allison Systems Eric Jones, The Label Company Paul Lancelle, Green Bay Engraving Gene Martin, The Robinette Co. Matt Moffett, The Meyers Printing Co. James Nelson, Great Lakes Packaging Corp. David R. Nieman, All Printing Resources Greg Platt, GMF Flexo Prepress David Straten, Advance Packaging Corp. Michael Reinhardt, Windmoeller 8( Hoelscher Roxanne Baker, Cryovac Sealed Air Mark Cisternino, Flexographic Technical Association Larry Claton, Aquaflex Greg Collins, C- P Flexible Packaging Michael Ferrari, Procter 8( Gamble Gary Hilliard, Hood Packaging Michael Impastato, Flint Group Jean Jackson, Allison Systems Eric Jones, The Label Company Paul Lancelle, Green Bay Engraving Gene Martin, The Robinette Co. Matt Moffett, The Meyers Printing Co. Doug Nelson, Water Ink Technologies James Nelson, Great Lakes Packaging Corp. David R. Nieman, All Printing Resources Greg Platt, GMF Flexo Prepress David Straten, Advance Packaging Corp. Michael Reinhardt, Windmoeller 8( Hoelscher Mark Cisternino Raymond W. Bodwell, DuPont Packaging Graphics Catherine Haynes, All Printing Resources Jean Jackson, Allison Systems John Meyer, Western Michigan University Dave Nunez, International Paper John Paine, C-P Flexible Packaging Paul Wilson, Encore Washington Ltd.