Bonus Depreciation Extension Introduced
A bipartisan bill to extend bonus depreciation on aircraft purchases has been introduced in the Senate and the General Aviation Manufacturers Association is rooting for its passage. The bill was introduced by Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member Chuck Grassley. Bonus depreciation allows aircraft buyers to depreciate their purchase 50 percent in the first year instead of spreading the depreciation over five years. It was introduced in 2008 as part of the stimulus package and extended through 2009. "Bonus depreciation is a powerful incentive to purchase a GA aircraft and is proven to increase sales during difficult economic conditions," said GAMA CEO Pete Bunce. "It is the one tax provision we have asked Congress to pass to help offset the decline in sales due to the recession and bring back lost jobs."
GAMA says the impact of bonus depreciation is significant and one manufacturer calculated that it was a factor in 55 percent of its sales. This isn't a tax cut, however. The accelerated depreciation means write-offs in subsequent years will be less so the long-term impact on government finances is negligible.