Tax Law Sparks Questions on Purchases, Raises in Trucking

As transportation companies reap the rewards of tax relief

As transportation companies reap the rewards of tax relief stemming from the new tax law

Some CEOs have reinvested the extra cash into new tractor-trailers or bonuses for their employees. Riding a strong freight market, some trucking executives hope additional capacity will quickly translate into profits. But other trucking CEOs told Transport Topics that they will not modify capital expenditures this year, unwilling to blindly spend extra cash without a legitimate business case.

“Nobody is running out there to buy more trucks just to buy more trucks,” said KeyBanc Capital Markets analyst Todd Fowler. “We haven’t talked to anybody who is buying trucks to have trucks sitting around. It would be about a need for more capacity in a better economic environment.”

Proponents of the Tax Cuts and Jobs Act of 2017, passed in December, contend that tax relief will stimulate the economy, growing the demand to move freight. The law slashed tax rates on C corporations to 21% from 35%.For ‘S’ corporations, the typical structure of family-owned businesses, the tax rate will drop to 29.6% from 37% in most cases. Several large companies quickly announced wage increases or one-time bonuses to thank their employees.

 

Source : http://www.ttnews.com/articles/tax-law-sparks-questions-purchases-raises-trucking

 

on 12 February 2018