Town Hall: ‘100% bonus depreciation not expected to go away this year’


The 100% bonus depreciation available on business jet transactions since 2017 seems set to remain in place for the remainder of this year, René  Banglesdorf, co-founder and CEO, Charlie Bravo Aviation, told last week’s Corporate Jet Investor Town Hall online meeting ‘Bringing in new flyers’.

After the contribution of bonus depreciation was highlighted in the previous week’s Town Hall, Banglesdorf made enquiries about the prospect of the benefit remaining available this year. According to her contact on the US Congress Committee on Ways and Means, 100% bonus depreciation is likely to remain in place this year.

“There may be other tax things that come up this year that could be negative for our industry but [the contact and committee colleagues] … don’t expect bonus depreciation to go away this year,” Banglesdorf told Town Hall delegates. 

There are even proposals to make “this flavour” of bonus depreciation for new and used equipment a permanent part of the tax code. “That would be great for us here in the US for people who need that kind of instrument to buy equipment or invest in equipment,” she said. “That would be really positive, but we may get hit with higher corporate taxes or capital gains taxes this year.”

‘Horrible airline schedules’

The Charlie Bravo Aviation CEO confirmed reports of a rising tide of new entrants into private jet aviation. The “horrible airline schedules” and concerns over safety were prompting many who had previously considered purchasing an aircraft to invest in one. A big change was that prospective buyers were spending more time in online research about the suitability of various models and the associated maintenance costs.

“Our buyers are more educated than ever before about the kind of models that are out there. People are really coming to the table with a lot more information.” Also the decision by the governors of Mississippi and Texas to relax the rules about the mandatory wearing of masks provided grounds for optimism. “To me, that signals we are getting back to normal.”

Banglesdorf concluded: “I still think we have a good year in front of us.”

During the previous Town Hall, Joseph Carfagna Jr, president, Leading Edge Aviation Solutions, predicted the prospects for business jet sales this year and beyond could  be shaped by tax changes introduced by the Biden administration.

 A very robust market’

 If the government decided to to end the 100% bonus deprecation, it could make the legislation retroactive to January 1st 2021 or implement the new tax rules from January 1st 2022. “If that’s the case, we are going to have a year that will be a lot like the last half of 2020 for the remainder of 2021,” said Carfagna. “It will be a very robust market in the US if that’s the case.”

The website of the Internal Revenue Service (IRS) confirms: The Tax Cuts and Jobs Act increased the bonus depreciation percentage from 50% to 100% for qualified property acquired and placed in service after September 27th, 2017, and before January 1st, 2023.”

This week, the US Centers for Disease Control and Prevention (CDC) has confirmed that fully vaccinated Americans can meet other fully vaccinated people without masks or social distancing. CDC added that people are protected two weeks after they take the final dose of their vaccine. So far, more than 30m Americans have been fully vaccinated.

Meanwhile, the Town Hall online meeting – ‘Bringing in new flyers’ –  took place on March 3rd. Joining Banglesdorf in contributing to the forum were: David McCown, president, Air Partner Inc., Glenn Gonzales, founder and CEO, Jet IT, Mark Molloy, president, Partners in Aviation and Peder von Harten, vice president, Sales & Marketing, Nicholas Air.

René Banglesdorf told Town Hall delegates: “I still think we have a good year in front of us.”