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.
In a resumption of his campaign against business aviation, President Obama yesterday called for an end to “tax breaks” for corporate jet owners.
General aviation groups hailed the passage late last month of a bonus depreciation bill, H.R.5297, that will allow for accelerated depreciation of business aircraft. The House of Representatives already passed this legislation in June, but had to vote on it again on September 23 because the Senate’s version approved a week earlier contained minor differences.
With the rancor over business jet use now receding in Congress’s rear-view mirror, House and Senate lawmakers are jumping in line to extend accelerated depreciation for major equipment purchases– including general aviation aircraft–in 2010.
The business jet market saw 2.4 percent of the worldwide fleet change hands via resale retail transactions in the second quarter, according to a quarterly pre-owned bizjet market update released this week by Amstat. This is higher than the 2.0-percent figure recorded in the first quarter.
In written testimony delivered yesterday to the U.S. House Committee on Small Business, NBAA president and CEO Ed Bolen repeated the business aviation community’s support for legislative proposals to renew bonus depreciation for investments in strategic business assets, including aircraft. The committee held a hearing yesterday about extending the bonus depreciation for business investments that expired last year.
Two congressmen have sent a letter to the House Ways and Means Committee asking the tax-writing body to extend the bonus depreciation incentive for noncommercial aircraft purchases.
Under bonus depreciation, companies and individuals were allowed to claim an additional depreciation of up to 50 percent during the first year after purchase on capital equipment used primarily for business and placed in service by the end of last year.
According to JP Morgan Global Equity Research, pre-owned business jet inventories in June remained stable at 14.4 percent of the active fleet, “a further sign of stabilization at this very high level.” Used inventories of Cessna, Embraer and Hawker Beechcraft jets decreased, according to the report, “while other OEMs saw inventories rise.” Of the 23 aircraft models tracked by JP Morgan, 12 had higher inventories, 10 were lower and one was flat
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