While many capital intensive companies have been hoping for a tax law change that would allow for the immediate expensing of capital expenditures, that possibility may not have a likely chance of becoming reality.
While changes to the existing law may result in some incremental impacts, the ability to expense all costs immediately looks less certain. Companies should plan accordingly if the depreciation rules do not change much. At the same time, tax rates could decline and businesses should consider conducting a cost segregation analysis sooner rather than later to prepare accordingly.
Another potential boon for many companies—a costly proposal to allow them to fully deduct their capital spending from income immediately instead of over years—didn't receive full-throated support in the joint statement. The statement called for “unprecedented” expensing, but didn't make clear that it would be full and immediate.