When President Bush last month signed a tax law that extends the “placed-in-service” deadline to the end of next year for new aircraft buyers to qualify for the 50-percent bonus-depreciation allowance, he also enacted a provision of the new law that isn’t such good news. NBAA noted that the new tax law sets more stringent limits on expenses a company can deduct when there is personal use of an employer-provided aircraft.
Financing, Insurance and Taxes » Taxes
Tax issues for aircraft operators.
Both houses of Congress passed a bill that extends until December 31 next year the “placed-in-service” deadline for business aircraft purchased on or before December 31 this year to qualify for a 50-percent bonus depreciation allowance. It became law when President Bush signed the bill on October 22.
“The FAA, and the IRS…they really don’t think alike,” began tax attorney Gary Garofalo, first speaker at the NBAA Federal Aviation Tax Forum in Arlington, Va., on May 7. Some 80 specialists, accountants and financial officers attended the most advanced forum the NBAA tax committee has held on aircraft taxation.
A coalition of general aviation interests was successful in getting aircraft sales and use taxes repealed in Rhode Island when Gov. Donald Carcieri signed legislation that exempts the sale, storage, use or other consumption of new or used aircraft and aircraft parts from taxation. Labor charges continue to be exempt where they are separately stated by the seller.
The tax committee of the NBAA will host two events in conjunction with its 57th annual meeting and convention in Las Vegas in October. The NBAA 13th Annual Tax, Regulatory & Risk Management Conference (previously known as the NBAA Tax Conference) is scheduled for October 10 and 11 at the Las Vegas Hilton.
A new European aircraft registry designed specifically for corporate jets–which promises a high level of service and competitive rates–has a range of M-prefixed registration options to offer as well.
The House of Representatives approved the American Jobs Creation Act of 2004 (H.R.4520) on June 17, paving the way for a one-year extension of the time allotted to place into service business aircraft purchased under the accelerated-depreciation tax bonus.
Personal use of corporate aircraft is coming under increasing attack by Congress.
A bill has been submitted in the House of Representatives that seeks to restrict a company’s ability to deduct certain portions of a flight conducted for personal use.
Titled the Corporate Jet Tax Shelter Reform Act of 2004, H.R.4352 was referred to the House Ways and Means Committee for further action.
Want to know what your aviation state taxes are being used for, how to apply for refunds and other tax details? Then you might want to check out the 2004 State Tax Guide for General Aviation from costing analysts Conklin & de Decker. The guide, which comes on a CD-ROM, also shows how sales and use taxes apply to aircraft sales, ownership, leases, parts, labor, fuel purchases and maintenance.
A tax seminar specifically geared toward Part 135 air-charter operators will be held on May 17 in Las Vegas in conjunction with the National Air Transportation Association’s annual convention. The seminar will be presented by Nel Sanders-Stubbs, a partner with Conklin & de Decker business-aviation costing analysts of Orleans, Mass.