U.S. Senate Considers Legislation To Extend Bonus
Depreciation
A couple of encouraging notes for
individual and corporate aircraft owners. First, out-of-state
pilots with new airplanes wanting to fly to the state of Florida
will be relieved to hear that Florida governor Charlie Crist
(pictured, right) has signed a bill which will allow
out-of-state non-Florida resident aircraft owners to visit Florida
without fear of being assessed a use tax.
Florida tax law had stated that an aircraft entering Florida
within the first six months of purchase will be presumed to be
purchased for use in Florida and may be subject to Florida use tax.
The provision did not affect Florida residents and other
individuals that have economic and business ties to the state of
Florida.
This new law is a major victory for aircraft owners around the
country because Florida is a popular destination both for personal
and business use aircraft. Orlando and other cities in Florida are
major tourist attractions and many pilots visit Florida annually
for tradeshows like Sun N Fun in Lakeland in April, or Simcom for
recurring training. The new legislation went into effect on July 1,
2010 and it allows non-resident aircraft owners to visit Florida
without the risk of incurring a Florida use tax assessment.
Under the new law, within 6 months of purchasing an aircraft,
out-of-state owners will now be able to visit Florida with that
aircraft for less than a total of 21 days for any purpose. Aircraft
purchased within the previous 6 months will be able to visit
Florida for an unlimited amount of time for the exclusive purpose
of flight training, repairs, alterations, refitting, or
modification purposes.
Aviation Tax Consultants says that
taking delivery of an aircraft in Florida continues to be an area
of concern for many aircraft owners. Florida does have a
“fly-away” exemption which allows nonresidents to
purchase an aircraft in Florida without being subject to Florida
sales tax – provided that some detailed documentation is
submitted to the Florida Department of Revenue within the
prescribed time frame to claim this exemption.
A little known fact about the fly-away exemption is that only
aircraft purchased from a registered Florida aircraft dealer will
qualify for the exemption. Therefore, if you purchase an aircraft
from a Florida resident and you take delivery of the aircraft in
Florida, this transaction will be subject to Florida sales tax,
regardless of how soon you remove the plane from Florida after
closing. Despite the enactment of the new Florida legislation
exempting non-Florida residents from Florida sales and use tax,
there are many scenarios where a lack of proper planning would
result in a surprise tax bill from the State of Florida.
At the federal level, On Monday
June 21, 2010, Senate Finance Chairman Max Baucus (D-Mont.) and
ranking member Chuck Grassley (R-Iowa) introduced a bi-partisan
legislation that will extend 50% bonus depreciation for 2010.
Bonus Depreciation Extension to Create Jobs Act (S.3513) will
allow qualified taxpayers to deduct 50% of the cost of a new
business aircraft purchased in 2010. There is bi-partisan support
of the bill in the Senate. The current language of the bill will
extend bonus depreciation retroactive to January 1, 2010 and
it is scheduled to expire on December 31, 2010.
While there is no consensus as to whether this bill will be
passed by both Houses of Congress and enacted into law, Aviation
Tax Consultants says it may be wise to begin planning for
the purchase of a new business aircraft if you can benefit from the
generous bonus depreciation in 2010. With the tightening of credit
and the reduced production by most manufacturers, you may begin the
purchase process so that you are in position to complete the
purchase before the end of the tax year if bonus depreciation
returns.
ANN's Daily Aero-Linx (09.29.24)
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