HR4853 Includes New And Used Aircraft Up To $500,000

Congress has passed, and President Obama has signed, a compromise tax bill which includes the extension of 100 percent bonus depreciation of assets worth up to $500,000 acquired after September 8, 2010 through December 31 of next year.

The expense can be a new or used airplane purchased in 2010  and 2011.

The tax proposal, first outlined by the White House, would include allowing businesses 100-percent expensing of investments in those capital assets and an accelerated, or "bonus," depreciation allowance of 50 percent during 2012. A bonus depreciation extension through the end of 2010 has already been signed into law. Purchasers of noncommercial aircraft will have an extra year to put the plane in service and qualify for expensing and bonus depreciation.

“We could not be more pleased by the bipartisan effort that resulted in a swift passage of this tax bill through both chambers of Congress and now to the president,” said GAMA President and CEO Pete Bunce. “This important legislation contains two provisions that are critical to the recovery of the general aviation manufacturing industry. The first permits 100 percent depreciation of capital investments including aircraft engines, avionics and other upgrades to aircraft during 2011 and 50 percent depreciation of investments made in 2012.  Due to their longer production cycle, general aviation aircraft will also be eligible for 100 percent depreciation in 2012 and 50 percent in 2013. The bill also extends the important research and development (R&D) tax credit for two years, which will allow businesses to receive credit for this year’s (2010) research expenditures and also permit companies to plan for 2011.”

Bunce added, “This bill will help provide the certainty and incentives our manufacturers need to start growing again by encouraging investment and creating demand.  Most importantly, these provisions will boost job growth in 2011 and beyond and support a critical sector in the U.S. and global economy.” 

"NBAA is pleased that the administration and congressional leaders are considering additional ways in which tax incentives can be applied to investments in strategic business assets, including aircraft," said NBAA President and CEO Ed Bolen when the bill was introduced late last week.

FMI: www.gama.aero, www.nbaa.org