Second District Republican Congressman Joe Wilson visited Dempsey Wood Products in Orangeburg on Wednesday to get a first-hand look at the impact the Tax Cuts and Jobs Act has had on the company’s growth.
Parker Dempsey, president of Dempsey Wood Products, along with his father, Ronny Dempsey, vice president of the company, talked with Wilson about the benefits of the act.
“I’m surely grateful of the chairman of the Ways and Means Committee that was so vital in coming up with this, Kevin Brady of Texas,” Wilson said.
The law allows businesses to deduct the full purchase price of qualifying equipment or software. Essentially, if a company buys or leases a piece of qualifying equipment, it can deduct the full price from its gross income. The purpose of the incentive is to encourage businesses to invest in themselves, according to officials.
Wilson said several companies around the state have benefited from the law, including areas outside The T&D region such as Columbia and Aiken.
Signed into law by President Donald Trump in 2017, the Tax Cuts and Jobs Act has contributed to the expansion of his company, Ronny Dempsey said.
“We’ve got a big expansion going on now, and we wouldn’t be able to do it without the tax situation and the accelerated depreciation,” he said. That depreciation is a part of the law and is being offered at 100 percent in 2018 but is subject to yearly change.
Dempsey said the company had “slow times during 2008 to 2011.”
“We had some tough times, and things got turned around. I’m telling you, Section 179 (of the act) was a great help,” he said.
“We were able to put some cash aside, then put it right back in the business to get the business back growing again. There really wasn’t much growth for four or five years. In 2014, we started growing again,” Dempsey said.
He again credited the depreciation, this time as a catalyst for a $15 million project the company has launched.
“This project we’ve got going now initially probably won’t create a lot of jobs, but it’s going to put us in position to start up a second shift,” Dempsey said.
“In other words, we’ll have new equipment and have the best technology,” he said. “The plan is to get it up and going and start a second shift, and probably add another 40 jobs. We’re in position to grow the business some more, and have been since about 2014."
Dempsey noted that growth has been seen in the increase of the number of workers the company employs.
In a span from 2014 to '17, “We’ve gone from about 65 employees to around 100," he said, crediting the employment increase to an increase in cash.
“A lot of that is due to having the cash to put back in the operation to create more needs."