Tax Issues

The important cashflow in any valid economic analysis is the so-called ‘aftertax’ cashflow. It’s significance will depend heavily upon the marginal tax rate of your business.

Lease
Simply put, all lease rent is fully (100%) tax deductible in the year incurred.

Purchase
The amount you spend when purchasing a sign is considered a low-capital cost allowance (tax depreciation) write-off class. Even after 20 years, you still will have not fully deducted your investment against taxable income. This factor wraps around all economic factors: rent, investment, alternate returns foregone, and maintenance costs. Make sure you take this into account when making a decision as it materially impacts the pre-tax numbers.