New 2003 Tax Law Offers Wide-Ranging Benefits for Landscaping
Industry
August 2003

The new 2003 Tax Law has the potential to give the landscape industry and installation contractors a major business boost, reported Michael McGrady, senior vice president at John Deere Landscapes.

“ Now commercial property owners and landlords who purchased their investment properties after May 5, 2003, can take a significant 52.5 percent depreciation allowance on all irrigation and landscape improvements this year,” he said.

“ This means that the cost of a new landscape or irrigation installation can be ‘written off’ at 52.5 percent in the first year,” he said.

“ This is a big incentive for owners and managers to upgrade their investment properties – and landscape professionals now have a powerful new sales tool,” he said.

“ When contractors show their commercial customers how landscape improvements can 1) improve their property’s value, 2) lessen their tax liability, and 3) improve their cash flow, they can convert more leads into sales.”

The new 2003 depreciation allowance applies to landscape improvements for apartment houses, commercial properties, office buildings, factories, industrial parks and other business facilities.

“ Previously, the tax law allowed property owners to depreciate their landscape improvements a little at a time, usually over 15 years,” said McGrady.

“Now property owners can take substantial tax deductions the first year.”

For example, if a property owner installs a new $10,000.00 irrigation system in a business park this year, he can deduct 52.5 percent of the cost (or $5,250.00) in 2003 as depreciation.

Other landscape improvements that qualify for this depreciation deduction include: landscaping • patios • fences • sidewalks • waterways • roads and canals.

It is also wise to remind clients that this overview of the tax law is a generalization and they should consult their tax advisors to see how it applies to their specific situations, said McGrady.

New Landscape Improvements Depreciation Allowance How It Adds Up
This reference chart shows how the new depreciation allowance adds up: