House passes Jumpstart Our Business Strength (JOBS) Act which includes extension of popular measure

The General Aviation Manufacturers Association (GAMA) responded enthusiastically to the House's passage of the Jumpstart Our Business Strength (JOBS) Act conference agreement.

Included in the bill is a provision extending through 2005 the accelerated (bonus) depreciation "placed-in-service" date for general aviation aircraft, as well as wording that makes the tax bill comply with World Trade organization practices. The latter will hopefully head off European Union trade sanctions.

The changes made to comply with WTO regulations specifically affect the Boeing Co., which received $1.15 billion in tax breaks from 1997 to 2002. This bill will eliminate those breaks.

The Senate is expected to pass the agreement today or this weekend before it recesses for the election. The bill then goes to the President for his signature. While the White House recently supported the bill, there has been no indication of when the President will sign it into law.

"We are delighted that Congress acted to include this important provision," said Ron Swanda, GAMA's interim president.

“Extending the placed-in-service date is vital to the continued recovery of our industry. Without this extension, aircraft purchased this year but delivered next year, would not have qualified for bonus depreciation. Our customers now have a real incentive to purchase a new aircraft before the end of the year. With the National Business Aviation Association convention next week, this could not have come at a better time."

Since it was enacted last year, bonus depreciation has been the deciding factor in 35 percent of all aircraft purchased. It provides a compelling reason to buy now, rather than defer, capital purchases. In a weak economy, bonus depreciation increases general aviation sales, allowing job retention and further hiring.

Under the provision, a company can deduct up to half of a purchase's cost, plus the normal depreciation, in the first year after purchase.

FMI: www.GAMA.aero