Association Says Passage Will Boost General Aviation Manufacturing

GAMA has called on Congress to swiftly pass President Obama's recently announced bipartisan tax agreement to help boost general aviation manufacturing and restore lost industry jobs.

GAMA CEO Pete Bunce

"We support this agreement because it contains two key provisions that will create needed growth in general aviation manufacturing. It permits businesses to expense capital investments and it also extends the research and development tax credit," GAMAs President and CEO Pete Bunce said in a news release Monday. "These proposals are extremely well-targeted to create jobs, stimulate innovation, and get production lines moving again at manufacturing plants."

The first provision permits 100 percent depreciation of capital investments by businesses during 2011 and 50 percent depreciation of investments made in 2012. Eligible investments include aircraft, engines, avionics and other upgrades. Due to their longer production cycle, aircraft deliveries will also be eligible for 100 percent depreciation in 2012 and 50 percent in 2013.

The agreement also calls for a two year extension to the research and development (R&D) tax credit. This extension (2010 and 2011) will allow businesses to receive credit for this year's research expenditures and also permit companies to plan expenditures for 2011 in a more certain tax environment. This credit has proven very effective at encouraging technical advancements and sustaining economic growth in the industry.

"We believe the expensing provision will encourage sales of airplanes, engines, and avionics in a market that continues to experience a very slow recovery from the recession. It will also benefit companies and employees of maintenance and completion centers that overhaul aircraft and install equipment," said Bunce. "We hope that Congress will not miss this tremendous opportunity to strengthen the general aviation manufacturing industry."

FMI: www.gama.aero