Lawmakers could renew depreciation
With the rancor over business jet use now receding in Congress’s rear-view mirror, House and Senate lawmakers are jumping in line to extend accelerated depreciation for major equipment purchases– including general aviation aircraft–in 2010.
Following a similar move in the House, Senate Finance Committee chairman Max Baucus (D-Mont.) and ranking Republican Chuck Grassley (Iowa) introduced a
bill that would do just that. The previously existing accelerated-depreciation policy expired at the end of last year.
“Bonus depreciation is a proven incentive for businesses to accelerate replacement and purchases of essential equipment, including GA aircraft,” said NBAA president
and CEO Ed Bolen.
“Bonus depreciation is a powerful incentive to purchase a GA aircraft and is proven to increase sales during difficult economic conditions,” said Pete Bunce, president and CEO of the General Aviation Manufacturers Association (GAMA). “It is the one tax provision we have asked Congress to pass to help offset the decline in sales due to the recession and bring back lost jobs.”
Bonus depreciation was enacted as part of the 2008 economic stimulus efforts and was extended through the end of 2009 in the American Recovery and Reinvestment Act. It allows a business to deduct an additional 50 percent of an asset’s depreciable value in the first year instead of spreading it out over five years.
According to GAMA, one GA manufacturer reported that bonus depreciation accounted for 55 percent of all piston sales last year. “When small businesses are able to recoup the cost of purchases more quickly,” said Baucus, “they have more cash on hand to invest back in the business and create jobs.”
He is working on a job creation bill with the Small Business Committee and hopes to include bonus depreciation in that package.
In the House, 11 Democrats and seven Republicans sent a letter to Ways and Means Committee chairman Rep. Sander Levin (D-Mich.) and ranking minority member Rep. David Camp (R-Mich.) asking them to incorporate bonus depreciation in the Small Business Jobs bill.
The congressional letter follows an open letter that NBAA and GAMA, along with more than 80 American businesses and organizations, sent to House and Senate leaders calling for a renewal of bonus depreciation.