Cessna CEO Lobbies For Tax-Break Extension
Cessna CEO Russ Meyer told the FAA forecast conference in Washington last week that if the current "bonus depreciation" tax break, which expires at the end of this year, isn't at least partially extended, aircraft production schedules could be cut by 10 to 20 percent, and thousands of jobs could be lost, The Wichita Eagle reported Saturday. Meyer told the Eagle that he wasn't predicting definite cutbacks, though -- economic growth and new Cessna models could help maintain staff levels. But he'd be more comfortable if the tax break were extended, he said. Bonus depreciation has generated over $2 billion worth of new airplane orders since its enactment last May, according to the General Aviation Manufacturers Association (GAMA). The tax break allows businesses to deduct up to 60 percent of the cost of commercial vehicles and equipment -- like business jets -- in the first year after the purchase, rather than the standard 20 percent. New orders generated by the change have preserved or created more than 20,000 airplane manufacturing jobs in the United States, GAMA said. In order to qualify for this accelerated depreciation schedule, the new capital equipment must be purchased and placed in service before Jan. 1, 2005, which can be a problem for aircraft sales, because they take so long from sale to delivery. Unless bonus depreciation is promptly extended and/or the placed-in-service requirement eliminated, all of the momentum and jobs that have come about as a result of bonus depreciation will be lost, GAMA said. Meanwhile, the Rhode Island state legislature is considering a bill that would exempt GA aircraft from state sales taxes. The R.I. Airport Corp. said that if the tax were eliminated, more companies and individual owners would base their airplanes in Rhode Island instead of neighboring states, boosting the economy and creating jobs.