Several tax incentives that benefit the construction industry are set to lapse on Dec. 31, and industry officials say Congress isn't likely to extend them before that deadline. Lawmakers may act in 2014 to revive these "extenders" and make them retroactive. Some groups are more worried than others about the tax breaks' coming expiration, but most agree that yearly extensions are a poor substitute for broad tax reform.
Some construction firms immediately will feel the loss of accelerated bonus depreciation for equipment, says Liam Donovan, Associated Builders and Contractors director of legislative and political affairs. Through 2011, companies could write off 100% of the cost of new equipment purchased that year. In 2012, they could expense 50% of such costs. The incentive will disappear for 2013, unless Congress extends it. ABC prefers the 100% write-off to the 50% provision. At the lower level, it is not a major incentive to buy big-ticket items, Donovan says.