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Vigorous Economic Stimulus Package Is Critical

Wednesday, January 28, 2009

MOLINE, IL — The American Rental Association (ARA) is advocating an economic stimulus package that provides tax relief that spurs investment in the rental industry along with significant spending on infrastructure that will help lift the declining equipment rental industry. More than 4,000 equipment rental businesses and 1,100 equipment manufacturers in the U.S. make up this $35.3 billion industry which employs tens of thousands and does business in all 50 states. The economic downturn has serious implications on the forecast and continued vibrancy of the equipment rental industry. As the industry leader, the ARA stresses the importance of action to help the U.S economy, rental businesses and suppliers rebound.

Specific provisions supported by the ARA include a two-year extension of Section 179 expensing for small businesses with a $250,000 annual expensing limit for businesses with an aggregate annual investment in qualifying equipment of $800,000 or less and a two-year extension of the 50 percent bonus depreciation. These terms allow for rental businesses to purchase new equipment and recapitalize their rental fleet when the economy rebounds. In addition, the ARA supports the proposed five-year carry-back on net operating losses.

Investment in our nation’s infrastructure is another important element of a stimulus package designed to aid the weakening equipment rental industry. Spending on infrastructure will provide a positive return for rental companies who provide capital equipment required for these projects. Projects created under the economic stimulus will also create more employment opportunities in rental stores, equipment suppliers and at infrastructure job sites. The ARA calls for quick action from the House and Senate to approve both the tax and spending portions of the infrastructure package.

“We are at a critical time with the current economic situation. The price of inaction is too great to ignore,” says Christine Wehrman, executive vice president and CEO of ARA. “As the industry leader, we must be a strong advocate for measures that will bring about improvement in the economy. Our preliminary analysis suggests a steep decline in rental revenue in 2009 and into 2010, so a robust and well-crafted stimulus package is critical to our sizable industry.”

In February, the ARA will release the 2008 State of the Equipment Rental Industry report which is a joint project with IHS Global Insight, the leading economic forecasting firm in the world with over 3,800 clients in industry, finance and government. This is the third annual report, but is the first to illustrate a decline in the size and shape of the equipment rental industry.

The ARA hosts The Rental Show, the largest rental trade show in the world, March 2-5 at the Georgia World Congress Center in Atlanta. This Show annually brings together more than 650 exhibitors and thousands of visitors from all 50 states, every Canadian province and nearly 50 countries. The Rental Show consistently ranks as the No. 1 ARA member service and is currently ranked No. 61 on the Tradeshow Week 200 annual list of top U.S. trade shows. The Show features educational seminars, networking events and an active buying trade show floor.

About ARA
The American Rental Association (www.ARArental.org) is an international trade association for the owners of equipment rental businesses and the manufacturers and suppliers of construction/industrial, general tool, and party/event rental equipment. ARA members, which include more than 7,500 rental businesses and 1,100 manufacturers and suppliers, are located in every U.S. state, every Canadian province, and more than 30 countries worldwide. Now in its sixth decade of operation, ARA is the source for information, advocacy, business development tools, education and training, networking and marketplace opportunities for the rental equipment industry throughout the world. According to the ARA’s most recent State of the Equipment Rental Industry research study, the rental industry revenue in the United States is estimated at approximately $35.3 billion annually.

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