Airplane Tax Break Passes Senate
Perhaps the single most important factor in the aircraft business's tenuous recovery (according to some) appears to be headed for an extension. The Wichita Eagle is reporting that an extension of the bonus depreciation tax incentive for airplanes is part of a tax package that has been passed by the Senate. Bonus depreciation allows businesses to depreciate large purchases (like airplanes) much faster in the first year, thus reducing the net cost of the purchases by reducing the company's tax bill. The current measure was due to expire at the end of September but aircraft companies and industry associations lobbied to extend the provision for airplanes because they take so much longer to build than many other items. In its annual report, the General Aviation Manufacturers Association cited the tax incentive as a key factor in the across-the-board increase in aircraft sales in 2003.