The US House of Representatives have passed a bill which will grant businesses who buy new general aviation aircraft and components a bonus depreciation tax incentive in a move which is expected to give a major boost to the GA manufacturing industry.
“We are pleased that the House acted so quickly to pass the final version of this important legislation,” said the General Aviation Manufacturers Association’s president and CEO Pete Bunce. “A quick signature from President Obama will allow operators to take advantage of this provision before the end of the year. As a proven stimulus to increase sales, we are optimistic that an extension of bonus depreciation will help re-energise an industry that continues to struggle with slowed production lines and diminished customer demand.”
The bonus depreciation provision allows a business that purchases a general aviation aircraft to deduct the normal depreciation allowance as well as an additional 50 per cent of the depreciable value of the aircraft in the first year after delivery, instead of spreading it out evenly over five years.
Locally, a number of groups have been pushing for similar bonus depreciation policies on new aircraft as a way of encouraging investment in the GA industry and to help address ageing aircraft issues. Many local aircraft dealers reported that the federal government’s ‘investment allowance’ depreciation scheme for businesses brought in during 2009 led to a major increase in interest in new aircraft.