WASHINGTON - The United Motorcoach Association is supporting a bill that would reinstate and extend bonus depreciation for an additional two years for most business taxpayers.

U.S. Rep. Joe Wilson, a Republican from South Carolina's second district, has introduced a bill that would reinstate 50-percent bonus depreciation as of the first of this year.

H.R. 364 not only would reinstate bonus depreciation but as of Jan. 1, 2005, but extend it to Jan. 1, 2007.

For an asset-intensive industry like the motorcoach industry, the replacement of coaches during the two-year period of the bill would provide an immediate tax benefit for profitable operators.

Bonus depreciation, first passed under the Jobs Creation and Worker's Assistance Act of 2002 and renewed under the Jobs and Growth Tax Relief Reconciliation Act of 2003, allowed coach operators to deduct 30 percent (under the 2002 law) and later 50-percent (under the 2003 law) of a qualified asset's value in the first year it was placed in service. This is in addition to taking Modified Accelerated Cost Recovery System depreciation over the life of the coach.

The laws were designed to provide businesses with incentives to make asset purchases during the post-9/11 economic slowdown and help stimulate the U.S. economy.

Coach manufacturers indicated last year that some operators were able to take advantage of the bonus depreciation to update their fleets. Reinstatement of the provision would certainly be a welcome incentive for profitable operators looking to make new-coach purchases. Such depreciation can not only reduce a profitable company's tax liability but it may also boost near-term cash flow.

The 2003 bonus depreciation law applied to equipment purchased after May 5, 2003 and put into service before Jan. 1, 2005.

After its introduction, Wilson's bill was referred to the House Ways and Means Committee.

"Rest assured, this is a measure UMA approves of and supports," said Norm Littler, senior vice president of government and industry relations at the association.