Congress close on bonus depreciation
H.R.5297, the Small Business Lending Fund Act of 2010, contained a provision to allow bonus depreciation on equipment purchases, including general aviation aircraft, this year. Aircraft purchased before the end of this year must be placed into service by the end of next year.
Bonus depreciation permits a business to accelerate 50 percent of the depreciable value of a capital investment in the first year instead of spreading it out over five years, and is a proven tool for increasing aircraft sales. One GA manufacturer reported that bonus depreciation accounted for 55 percent of all piston airplane sales last year.
“NBAA applauds the Senate’s action, and urges the House to approve the Senate-passed version this month [September] to allow companies to take advantage of this accelerated, or ‘bonus,’ depreciation before the end of the year,” said NBAA president and CEO Ed Bolen.
Earlier this year, NBAA joined with more than 80 American businesses and organizations calling on Congress to renew bonus depreciation that expired at the end of last year to extend the tax benefits to preserve manufacturing jobs, and at the same time give companies immediate access to the benefits of asset investments.
“Our industry has been waiting for this key measure to be passed to help in our recovery,” said Pete Bunce, president and CEO of the General Aviation Manufacturers Association. “We look forward to swift passage of this bill in the House and to the President’s signature on this important piece of legislation.”
Bolen explained that accelerated depreciation is a proven investment incentive, and could significantly benefit the business aviation community. “The industry continues to grapple with a slow recovery from the drop-off in flight activity and aircraft sales, as well as job losses, in this challenging economic climate,” he said.