[Congressional Record (Bound Edition), Volume 147 (2001), Part 6]
[Extensions of Remarks]
[Page 8522]
[From the U.S. Government Publishing Office, www.gpo.gov]



          THE COMPUTER EQUIPMENT COMMON SENSE DEPRECIATION ACT

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                            HON. MAC COLLINS

                               of georgia

                    in the house of representatives

                         Thursday, May 17, 2001

  Mr. COLLINS. Mr. Speaker, I am joined by my colleague from Maryland, 
Congressman Ben Cardin and several of our other colleagues, to 
introduce legislation that will return common sense to the Internal 
Revenue Code by changing the depreciation period for computer 
equipment.
  The depreciation provisions in the Code have not been updated since 
the 1980s. Since that time, the technology available to manufacturers 
has literally exploded. Tax rules require businesses and manufacturers 
to keep their computer equipment ``on the books'' for five years. In 
highly competitive industries, the average economic life of the 
equipment ranges from 14 and 24 months, far shorter than depreciation 
rules. This skewed limitation places manufacturers at a competitive 
disadvantage.
  In a slowing economy, more flexibility is needed over capital 
investment choices. Many manufacturers would like to expand their 
businesses and increase employment opportunities. They would have 
greater opportunities to do so if the tax code recognized a more 
realistic economic life expectation for this equipment. Unfortunately, 
these business owners often put off investing in new equipment due to 
the unfavorable tax treatment they receive from the outdated computer 
depreciation schedule.
  Specifically, the legislation we are introducing would update the tax 
code to acknowledge the rapid advancements in computer technology by 
changing the depreciation period for computer equipment used in 
manufacturing processes from five years to two years. We need to 
encourage businesses to make investments that will keep them 
competitive, not penalize them with an outdated tax provision.
  Please join us in this effort to inject a little common sense into 
the Internal Revenue Code by cosponsoring the Computer Equipment Common 
Sense Depreciation Act.

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