If you needed another reason to purchase or upgrade your company security systems, the federal government just gave you a big one. New tax regulations signed into law late last year give some businesses a substantial tax break on new security, fire-protection and alarm systems.
The change is meant to encourage businesses to continue investing in themselves and keep money flowing. It will allow companies to take advantage of new technologies and put more resources into protecting staff, customers and property.
Before the change, section 179 of the tax code allowed businesses to deduct up to $500,000 in qualified property expenses per year. But, security and fire systems expenses weren’t included. Companies had to capitalize their security and fire safety investment and depreciate them over time. The new law changes all of that. The deduction level has doubled to $1 million per year and security and fire expenses now qualify. Businesses can deduct those investments in the first year.
The Security Industry Association (SIA) has put together a handy guide to understand these new tax changes. According to the organization, this is what qualifies:
- Security systems for the protection of the building and its occupants, including window and door locks, security cameras, recorders, monitors, motion detectors, security lighting, alarm systems, entry and access systems, related junction boxes, associated wiring and conduit
- Fire-protection and alarm systems, including sensing devices, computer controls, sprinkler heads, sprinkler mains, associated piping or plumbing, pumps, visual and audible alarms, alarm control panels, heat and smoke detection devices, fire escapes, fire doors, emergency exit lighting and signage, and fire-fighting equipment, such as extinguishers and hoses
Also the systems must be purchased and put into service the year they are deducted. And the full deduction is only available for businesses spending $2.5 million or less on qualifying purchases. The deduction decreases with each dollar over $2.5 million and there is no deduction for companies spending more than $3.5 million.
The new tax code means that 2018 could be the year to upgrade your system while saving resources. Contact Security 101 for more information and ways we can help you take advantage of this opportunity.