President Barack Obama’s signing of bipartisan tax legislation enacted measures “critical to the recovery of the general aviation manufacturing industry,” said the General Aviation Manufacturers Association (GAMA).
“This bill will help provide the certainty and incentives our manufacturers need to start growing again by encouraging investment and creating demand,” said GAMA President Pete Bunce after Obama signed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 on Dec. 17. “Most importantly, these provisions will boost job growth in 2011 and beyond, and support a critical sector in the U.S. and global economy.”
GAMA had urged swift passage of the legislation, as AOPA reported Dec. 14. The new provisions are seen complementing recently extended bonus depreciation legislation, while providing additional benefits for GA manufacturing, research, and development, Bunce said.
“This important legislation contains two provisions that are critical to the recovery of the general aviation manufacturing industry. The first permits 100 percent depreciation of capital investments including aircraft engines, avionics, and other upgrades to aircraft during 2011 and 50 percent depreciation of investments made in 2012. Due to their longer production cycle, general aviation aircraft will also be eligible for 100 percent depreciation in 2012, and 50 percent in 2013,” he said.
In addition, “The bill also extends the important research and development tax credit for two years, which will allow businesses to receive credit for this year’s (2010) research expenditures, and also permit companies to plan for 2011.”
Those benefits would provide manufacturers with the “certainty and incentives” they need to plan for a future of increased production and job growth for the industry, he said.