Recently I have been hearing from glazing contractors how they are losing work to companies selling demountable glass partition systems. There are a number of these companies and generally they provide a good product. I want to add to this that I do not have a dog in this fight as we sell glass to these companies as well as glaziers, except that it concerns me how easy it is for a product to spread misinformation and leave a client at risk. Companies that make these systems prey on the idea that because the demountables are “furniture” they are depreciated on a faster schedule than a construction related capital improvement. That part of the tax code is correct, but can someone please explain why these new systems could by any stretch of the imagination be considered furniture.
Demountables were once systems that were compression based and basically fit between the floor and a ceiling with minimum pressure. Yeah I can buy that that can be considered furniture, but these days are anything but that. Today’s systems are designed with a variety of extrusion patterns that are assembled and mechanically connected to the ceiling and the floor, in almost exactly the same way that a glazier might install the system left to his own design. In essence they are the same thing. It seems that it is only a matter of time before the IRS catches up with this scheme leaving client’s left to battle the confusion. Granted they may not be any worse off if caught, but in my mind it doesn’t make the designer look good when they offer up this info because some salesperson told them that this was legal. My advice, check with your accountant and make sure your accountant checks with the IRS.
Click on the link and see an article written about just this subject.