Bill looks to allow expensing of security systems

Thursday, May 1, 2003

WASHINGTON - A new bill has been introduced in Congress that seeks to allow companies to write off, or expense 100 percent of the purchase price of new security equipment.

This bill is the second attempt to pass expensing for security systems. A similar bill which was introduced in the last session of Congress was eventually incorporated into an economic stimulus package and allowed for partial expensing of security equipment.

According to David Saddler, director of communications and marketing for the Security Industry Association (SIA), H.R. 1259, the Public Safety and Protection Investment Act of 2003, which was introduced by Rep. Jerry Weller (R-Ill.), is designed to give the security industry a boost.

The bill is being debated in the House Ways and Means Committee, and no timetable is set on when action will be taken.

Saddler said the concept of expensing security equipment was originally conceived by SIA before 9/11, and the issue came to Weller’s attention in the aftermath of the attacks.

“In the wake of 9/11, many companies and businesses and real estate owners are all looking for ways to harden their infrastructure,” said Ben Fallon, a Weller spokesperson.

“(This bill allows) businesses to make the purchases they have to make in an attractive tax situation,” said Saddler.

The bill, as originally written, would allow companies to take a tax write off totaling 100 percent of the cost of any new security equipment purchased.

“Congressman Weller’s hope is that by allowing full expensing in the first year, you encourage companies that wouldn’t necessarily have the ability to harden their facilities to do so,” said Fallon. “It’s a big financial burden, especially for small and midsized companies.”

While SIA and Weller are still committed to the goal of 100 percent expensing, both camps say it is likely that Congress may include the bill as a provision in a new national economic stimulus package.

“We don’t believe the bill ultimately in this session will stand on its own,” Saddler said.

In addition, Saddler said that the committee could decide to reduce the percentage to a figure less than 100 percent. “There are negotiations in the committee about that expense percentage,” he said.

Despite the fact that the bill is not likely to pass with 100 percent expensing, Saddler said the idea is to keep the issue before the legislature with the idea of gradually increasing the percentage of expensing over time.

Fallon said that he is unsure when the committee will take any action on the bill. “It’s really fluid right now,” said Fallon. “I think we’re looking at (a decision being made in) the next couple of months.”

A similar bill, introduced by Weller in the last session of Congress, was included in the last economic stimulus package passed in the last session, and it allowed 30 percent expensing of all new security equipment that was purchased retroactive to Sept. 10, 2001.

While Saddler said he would like to see the bill pass as written, it may take some time before that happens.

“Our goal is 100 percent expensing, and we will continue to work towards that goal,” Saddler continued. “But we’ll take year-by-year victories that enhance the expensing portion for security.”