Tax laws that affect business aircraft owners are constantly changing, and a new law this year makes the process of complying with these tax laws even more complex. Dean Sonderegger, director of product management at Bloomberg BNA Software, explained the new law and how his company’s software helps owners keep track of tax implications to ensure that they meet the legal requirements and don’t pay more tax than is necessary.
Last Thursday, the House Ways and Means Committee approved H.R.4718, a bill that would make accelerated, or bonus, depreciation permanent. If passed, this would allow for 50 percent of costs for new investments in equipment and software–a list that includes such things as business jets–to be written off in the first year. More than 150 groups, including NBAA and NATA, supported the legislation.
NBAA and more than 150 other associations and coalitions sent a letter last week to the U.S. Senate urging swift passage of a bill to restore tax incentives that expired last year, including accelerated depreciation on purchases of long-term capital assets such as business aircraft.
On May 2, NBAA is holding its one-day Business Aviation Tax Seminar at the Hilton San Francisco Financial District. The seminar begins at 8 a.m. Among the subjects to be covered are two key tax issues for business aircraft operators: the application of the federal excise tax (FET) to managed aircraft flying under Part 91; and “Federal Audit Traps and Solutions for Aircraft Leasing Structures.”
Signature Flight Support’s bid to purchase the Jet Systems and Million Air White Plains FBOs at Westchester County Airport stalled when last week’s vote on the transaction by the county board of legislators was tabled until next year.
NBAA has released an updated version of its Federal Excise Taxes Guide: Details on Air Transportation and Fuel Taxes. Last published in 2005 as the NBAA Federal Excise Tax Handbook, the new guide includes areas that have seen changes–such as the application of FET on fractional aircraft ownership operations; IRS legal interpretations regarding aircraft service and pilot service agreements; and reimbursement under the “Schwab re-interpretation,” based upon the latest information from the IRS, and other sources.
As most NBAA attendees will attest, the safe and legal operation of an aircraft is a complex task. With a seemingly endless list of agencies to answer to, it is all too easy for something to fall through the cracks. Aviation law specialist Advocate Consulting Legal Group (Booth No. C9314) assists its clients in developing and implementing entity structures and contractual arrangements to maximize tax savings, while complying with FAA, DOT and state regulatory requirements.
Overseas visitors may be puzzled by the number of so-called “trading” firms prominently placed in the LABACE exhibition areas. Why at an event that lets potential purchasers meet directly with manufacturers do Brazilian middlemen occupy so much space?
Wisconsin MROs have once again been foiled in their attempt to get the state legislature to exempt private aircraft maintenance and modification from the 5.5-percent state sales tax. While the tax does not apply to aircraft operated under Part 121 or 135 certificates, it does apply to those operating under Part 91.
NBAA president and CEO Ed Bolen gave a big thumbs down yesterday to legislation sponsored by Sen. Kirsten Gillibrand (D-N.Y.) “that would single out one industry, general aviation, for a change in its established depreciation schedule.” Gillibrand’s proposal would extend the current five-year tax-depreciation schedule for general aviation aircraft to seven years.
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