Also don't forget property tax.
A dollar buyout, usually means the buyer owns it, and the purchase is subject
to personal property tax. (which in our county comes close to 3% per year).
In a Fair Market Value Lease buyer does not need to pay PPT.
Note: In FMV leases the Leasor may not necessarilly pay PPT either, because PPT
is usually paid on assets that reside in the state the tax is applicable. As
well, with dollar Buyout, buyers may not necessarilly pay PPT if equipment is
deployed in a state that does not charge/assess PPT on wireless infrastructure.
PPT can be a huge burden on how a WISP needs to tracks its purchases. What
General Ledger account purchases apply to for PPT purposes would be different
depending on what state the equipment would be used in. The risk is... If you
don't report PPT on your purchases, it brings up a flag, that you likely would
have sold it instead, and be applicable for Sales Tax, which is higher. Tax
Auditors don;t really understand that WISPs exist with the situation that all
purchased owned property, might actually be NON-Taxable because of special
provision made so WISPs don't have to pay PPT on those assets.
So FMV leasing gets rid of all that tracking headache. We personally prefer $1
Buyout, but it does create challenges for PPT tracking.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: Travis Johnson
To: WISPA General List
Sent: Wednesday, October 29, 2008 10:54 PM
Subject: Re: [WISPA] Equip Leasing
Marlon,
The difference with "fair market value" leasing is that you get to deduct the
full amount of each monthly payment because it's a "true lease"... so you don't
have to depreciate the equipment and deal with tax law changes every year and
wonder if you are going to be over or under the limit, etc.
Some leases are going to work better for some companies than others. This
year, because of tax law changes for 2008, we actually will bump right up
against the new limit of taking the full deduction on our equipment purchases.
Check with your accountant on which type of lease is best for your company.
Travis
Microserv
Marlon K. Schafer wrote:
We use bank money when ever we can. No surprises that way.
I've leased gear from Tiger Leasing in the past. Steve is great.
Make sure that you nail down the buyout. I usually shoot for $1.00 buyouts.
At the very least a fixed number. None of that "fair market value" crap.
They get to pick that number, not you.
laters,
marlon
----- Original Message -----
From: <[EMAIL PROTECTED]>
To: <wireless@wispa.org>
Sent: Wednesday, October 29, 2008 10:07 AM
Subject: [WISPA] Equip Leasing
Does anyone have a good relationship with a reputable equipment
leasing firm? If so, who are you using?
Thanks
Chris Cooper
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