Despite his rhetoric during a presidential debate that “corporate jets” should not get tax breaks, President Obama signed a bill–the American Taxpayer Relief Act of 2012–last week that extends the 50-percent accelerated depreciation for capital goods, notably including business aircraft, through the end of this year.
NBAA has joined other organizations in urging Congressional leaders to continue stimulating business capital expenditures by extending the accelerated, or “bonus,” depreciation that is set to expire at the end of this year. In a letter sent to both houses of Congress yesterday, the groups said, “It is imperative that we continue the 50-percent bonus depreciation…for 2013 and beyond. This will provide some certainty to U.S.
Owners and operators of business aircraft were disappointed last month when the IRS issued final regulations disallowing certain deductions for “entertainment” use of company aircraft.
The provisions were originally contained in the “American Jobs Creation Act of 2004.”
Under the new rules, the difference between the actual cost of personal entertainment flights provided for “specified individuals” and the amount included as income for the individual is disallowed as a deduction to the corporation.
After five years in proposed form, the IRS issued its final rule today disallowing tax deductions for “entertainment” (non-business) use of business aircraft. The rules apply whether the company owns, leases or charters the aircraft.
NBAA joined more than 60 businesses and organizations nationwide in signing a letter urging Congress to extend “bonus” depreciation, which allows for accelerated cost recovery of strategic purchases, including business aircraft. Bonus depreciation included in legislation signed into law in 2010 fell from 100 percent to 50 percent this year.
Accelerated depreciation for private aircraft became a hot topic again this past June when President Obama repeatedly cited it as a prime example of special tax breaks for the rich he wanted to eliminate.
General Aviation Manufacturers Association president and CEO Pete Bunce says recent general aviation rallies held following disparaging remarks about business aviation by President Obama actually go back to the end of 2008 when the CEOs from the Big Three automakers took separate company airplanes to testify before Congress.
Business aviation may still be brimming with righteous indignation over recent attacks by President Barack Obama (in the row over bonus depreciation) and The Wall Street Journal (over the Block Aircraft Registration Request issue), but it now faces bigger and more tangible problems.
President Obama had barely concluded his June 29 press conference when my e-mail box began filling up with responses from the general-aviation industry. The NBAA expressed “dismay” and announced that it was sending a “strongly worded” letter to the President about his remarks, which it said “reflect a total lack of understanding” of the field.