NBAA is encouraging its members to weigh in with their lawmakers on bonus depreciation, like-kind exchanges, and aircraft management fee measures as Capitol Hill negotiates a final comprehensive tax bill this week. The House and Senate versions of the tax bill address different aspects of these measures.

Both provide for 100 percent immediate expensing (often referred to as bonus depreciation) of business assets, but the House bill covers both new and preowned aircraft. The measures would apply to purchases through 2023, but the Senate has a phase-down that continues through 2027.

While both bills would repeal like-kind exchanges for business assets, NBAA said the accelerated depreciation would help offset that. Under like-kind exchange measures, taxable gains on the sale of a business asset can be deferred if that asset is exchanged for a similar asset.

“The immediate expensing provision helps make up for the like-kind exchange repeal, but there is, of course, a sunset date for immediate expensing,” said NBAA senior director of government affairs Scott O’Brien. “But the Senate language, which does not allow immediate expensing for preowned equipment, is a disincentive for the purchase of preowned business aircraft.”

NBAA also noted the Senate bill measure clarifies that business aircraft management service fees are not subject to the commercial airline ticket tax.

Encouraging members to let their voices be heard on Capitol Hill, the association created an electronic letter to help members contact Congress specifically on accelerated depreciation.

“The association supports the language in the House bill, which allows immediate expensing for new and preowned business assets and preserves important tax benefits for businesses,” O’Brien said.