Aircraft Purchased This Year Must Be In Service By The End Of 2011

GAMA on Thursday issued a statement concerning Senate passage of H.R. 5297, the Small Business Lending Fund Act of 2010. The bill contains a provision that will permit bonus depreciation on equipment purchases in 2010 that includes GA aircraft. Aircraft purchased before the end of 2010 must be placed into service by the end of 2011 to receive bonus depreciation.

"GAMA wishes to thank Senate Finance Committee Chairman Max Baucus (D-MT) for his efforts to pass this bill through the Senate," said GAMA President and CEO Pete Bunce in the statement. "This incentive is a critically needed measure for bringing back jobs and boosting economic recovery in our industry."

Bonus depreciation allows a business to accelerate 50 percent of the depreciable value of a capital investment in the first year instead of spreading it out over five years and is a proven tool for increasing aircraft sales. One GA manufacturer reported that bonus depreciation accounted for 55 percent of all piston airplane sales in 2009.

Pete Bunce

"Our industry has been waiting for this key measure to be passed to help in our recovery," said Bunce. "We look forward to swift passage of this bill in the House and to the president's signature on this important piece of legislation."

The NBAA joined the chorus Friday. "NBAA applauds today's Senate action, and urges the House to approve the Senate-passed version this month to allow companies to take advantage of this accelerated, or 'bonus,' depreciation before the end of the year," said NBAA President and CEO Ed Bolen in a statement. "Allowing faster capital cost recovery of the purchase of company assets, including business aircraft, is helpful to business aviation and to our economy."

NBAA has repeatedly called on Capitol Hill lawmakers to support legislation to extend accelerated depreciation for investments in strategic business assets, including aircraft. In addition, NBAA has urged its Members in the business aviation community to use the Association's Contact Congress resource to reach out to their elected representatives and ask them to support accelerated depreciation bills. Anyone can still write to Congress and urge full passage of bonus depreciation legislation.

"Accelerated depreciation is a proven investment incentive, and could significantly benefit the business aviation community," Bolen explained. "The industry continues to grapple with a slow recovery from the drop-off in flight activity and aircraft sales, as well as job losses in this challenging economic climate."

Earlier this year, NBAA joined with more than 80 American businesses and organizations to send an open letter to House and Senate leaders calling for a renewal of bonus depreciation that expired at the end of 2009, to extend the tax benefits to preserve manufacturing jobs, and at the same time give companies immediate access to the benefits of asset investments, including the purchase of business aircraft.

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