February 9, 2012
By Jim Moore
A valuable tax incentive for business aircraft owners has scaled back for 2012, and a coalition of manufacturing groups led by the National Business Aviation Association (NBAA) is urging Congress to keep “bonus depreciation” intact.
More than 60 businesses and organizations co-signed the letter to lawmakers, noting the tax law gives businesses that might otherwise be unable an opportunity to purchase aircraft that keep them globally competitive, and that demand for aircraft directly creates jobs.
Under legislation enacted in 2010, businesses are allowed to use 100 percent of an aircraft’s depreciation in the first year to reduce total tax liability. Previously, business aircraft owners could only claim 20 percent of the depreciation in a year. In 2012, under current law, only 50 percent can be deducted in a single tax year.
“The business aviation community still faces economic headwinds, and we should not take an important tool like this one out of the toolbox for growing jobs and helping businesses acquire the assets they need to compete in a global marketplace,” NBAA President and CEO Ed Bolen said in a news release. “We call on Congress to extend the 100-percent accelerated depreciation for another year.”
An extension of the 100-percent depreciation rule was included in a House bill extending the payroll tax cut (H.R. 3630), and a joint House-Senate conference committee is currently considering the legislation.
The letter, sent Feb. 2 to the leaders of the conference committee, notes that the rule does not reduce tax liability, but simply changes the timing to allow taxpayers to benefit without delay.
NBAA and other supporters also are asking Congress to include language holding the tax incentive harmless from long-term accounting methods under I.R.C. Section 460, and allowing eligible companies to claim a portion of their unused Alternative Minimum Tax (AMT) credits in lieu of bonus depreciation.
AOPA Online Associate Editor Jim Moore joined AOPA in 2011 and is an instrument-rated private pilot who enjoys competition aerobatics.
National Business Aviation Association
The Flying Physicians Association (FPA) has become the latest group to lend support to third-class medical reform and urge government officials to speed up their review of the Federal Aviation Administration’s (FAA) notice of proposed rulemaking (NPRM). The NPRM would expand the number of pilots who could fly without needing to obtain a third-class medical certificate, a standard that has been successfully used by sport pilots for a decade.
There is no shortage of pilots in eastern Washington, but there does seem to be a scarcity of clubs in that part of the country.
A survey of flying doctors found that 80 percent favor third class medical reform.
VOLUNTEER AT AN AOPA FLY-IN NEAR YOU!
SHARE YOUR PASSION. VOLUNTEER AT AN AOPA FLY-IN. CLICK TO LEARN MORE >>>
VOLUNTEER LOCALLY AT AOPA FLY-IN! CLICK TO LEARN MORE >>>
BE A PART OF THE FLY-IN VOLUNTEER CREW! CLICK TO LEARN MORE >>>