US to offer bonus depreciation on jets
The National Business Aviation Association (NBAA) and the General Aviation Manufacturers Association (GAMA) have welcomed a US House of Representatives vote that allows bonus depreciation on business jets.
The provisions to allow bonus depreciation on strategic purchases – which include corporate aircraft – is part of a measure to help small businesses. It was passed by the US senate last week. President Obama will now be asked to sign the bill making it into law.
“NBAA is pleased that Congress has affirmed its support for accelerated depreciation through the passage of this legislation,” said Ed Bolen, NBAA President and CEO. “Once the President signs the bill including bonus depreciation into law, companies will be able to take advantage of the provision right away, giving them access to the benefits of business aviation.”
GAMA says that the bonus depreciation provision allows a business that purchases a general aviation aircraft to deduct the normal depreciation allowance as well as an additional 50% of the depreciable value of the aircraft in the first year after delivery, instead of spreading it out evenly over five years. It says the tax incentive is a proven way to help increase aircraft sales with one manufacturer saying that bonus depreciation accounted for 55% of all piston airplane sales in 2009.
To qualify aircraft must be bought before the end of 2010 and delivered before the end of 2011.
Pete Bunce, president and CEO of GAMA, also urged the President to sign the bill quickly. “”A quick signature from President Obama will allow operators to take advantage of this provision before the end of the year. As a proven stimulus to increase sales, we are optimistic that an extension of bonus depreciation will help re-energize an industry that continues to struggle with slowed production lines and diminished customer demand.”
Bunce praised representatives Todd Tiahrt, a Republican, from Kanasa, and Chris Carney, a Democrat from Pennsylvania for a joint letter they sent to the House Ways and Means Committee calling for the renewal of the provision that expired in 2009. “Their attention to this issue was greatly needed and we appreciate the support they have shown the general aviation industry,” he said.
Both GAMA and NBAA ran a number of campaigns to encourage House and Senate leaders to support bonus depreciation.
The NBAA asked its members to contact their own representatives.
“We thank the NBAA Members who made their voices heard with their elected officials on this issue of critical importance,” said Bolen. “Their support has clearly helped alert Congress to the urgency of passing this legislation, and demonstrates once again that when our industry mobilizes around our priority issues, we can help shape a positive policy environment for business aviation.”