Though its parent company Finmeccanica yesterday reported €786 million in losses last year, subsidiary AgustaWestland posted strong 2012 results that included revenues of €4.2 billion, new orders of €4 billion and an accumulated backlog of €11.87 billion, as well as earnings before interest, taxes and depreciation of €473 million. The helicopter manufacturer’s results reflected marginally improved results over its 2011 performance and also reflected a slight increase in research and development spending, to €506 million.
If I had to sum up the benefits of business jets in just one word, I might pick “convenience.” According to Wikipedia, “convenient procedures, products and services are those intended to increase ease in accessibility, save resources (such as time, effort and energy) and decrease frustration.”
Comments by President Obama’s press secretary that tax depreciation schedules constitute “loopholes” for corporate jets ignited a blitzkrieg of return fire from general aviation on Tuesday. Pete Bunce, chairman and CEO of the General Aviation Manufacturers Association, declared that politics in Washington continues to demonstrate that facts can be conveniently overlooked when one is trying to point fingers and score sound bites.
Despite his rhetoric during a presidential debate that “corporate jets” should not get tax breaks, President Obama signed a bill–the American Taxpayer Relief Act of 2012–last week that extends the 50-percent accelerated depreciation for capital goods, notably including business aircraft, through the end of this year.
NBAA has joined other organizations in urging Congressional leaders to continue stimulating business capital expenditures by extending the accelerated, or “bonus,” depreciation that is set to expire at the end of this year. In a letter sent to both houses of Congress yesterday, the groups said, “It is imperative that we continue the 50-percent bonus depreciation…for 2013 and beyond. This will provide some certainty to U.S.
Owners and operators of business aircraft were disappointed last month when the IRS issued final regulations disallowing certain deductions for “entertainment” use of company aircraft.
The provisions were originally contained in the “American Jobs Creation Act of 2004.”
Under the new rules, the difference between the actual cost of personal entertainment flights provided for “specified individuals” and the amount included as income for the individual is disallowed as a deduction to the corporation.
After five years in proposed form, the IRS issued its final rule today disallowing tax deductions for “entertainment” (non-business) use of business aircraft. The rules apply whether the company owns, leases or charters the aircraft.
NBAA joined more than 60 businesses and organizations nationwide in signing a letter urging Congress to extend “bonus” depreciation, which allows for accelerated cost recovery of strategic purchases, including business aircraft. Bonus depreciation included in legislation signed into law in 2010 fell from 100 percent to 50 percent this year.
Accelerated depreciation for private aircraft became a hot topic again this past June when President Obama repeatedly cited it as a prime example of special tax breaks for the rich he wanted to eliminate.