America’s corporations with private fleets as well as for-hire carriers are ordering units at an increased pace. The latest figures from ACT Research show that orders for Class-8 trucks surged 62% in October compared with activity from the previous month, and up 167% compared to a year ago. An economy that continues to strengthen is adding to this trend, as well as the need to replace aging equipment.

It’s critical for organizations to replace their aging equipment for multiple reasons, especially since the American economy continues to rely heavily on truck deliveries and commercial drivers. According to the Bureau of Transportation Statistics, more than $1 of every $10 produced in the U.S. GDP can be directly tied back to transport activity. Also, The American Trucking Association indicates that trucks contain 70% of America’s freight (by weight).

That being said, organizations must be cognizant of 2018 tax changes because the way they procure their equipment can have a significant impact to their overall business, bottom line and financial performance.

What are the Impending Tax Changes?

The tax plan proposed by the current administration contains several provisions that will impact equipment acquisition – lower tax rates for businesses, non-deductibility of interest expense for C corporations, limiting like-kind exchanges to real property, and expensing of depreciable assets instead of writing them off over years. While it’s hard to say how much of this ultimately gets implemented, the key is to know how these changes may impact a company’s balance sheet, financial plan, and tax strategy, and to adjust accordingly to help improve the company’s financial performance.

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