If your plans for the upcoming year include the purchase of a new aircraft for business use, NBAA has good news for you. Just last month, Congress once again demonstrated its strong support for business aviation assets by voting to extend several expiring tax provisions, including accelerated depreciation, for one year.
“NBAA applauds this action by the House to renew bonus depreciation and other tax incentives that encourage businesses to upgrade equipment and invest in assets such as aircraft,” said NBAA President and CEO Ed Bolen.
Bonus depreciation expired at the end of 2013, but NBAA and a broad coalition of industry groups have backed efforts in Congress to renew it retroactively as part of a package of tax “extenders.”
“Bonus depreciation strengthens our economy in two essential ways,” Bolen explained. “It gives our nation’s businesses immediate access to the most advanced equipment, including aircraft, making them more competitive, and it preserves jobs in America’s vital aircraft-manufacturing industry.”
For qualified property, accelerated depreciation allows businesses to take a first-year deduction equal to 50 percent of an asset’s cost basis. After the first year, the asset is depreciated according to the Modified Accelerated Cost Recovery System.
The House-passed bill also would renew increased limitations for Section 179 expensing. The provision allows businesses to expense, rather than depreciate, certain assets (such as aircraft parts) with a value up to $500,000.
The House of Representatives and the Senate have been working toward agreement on a tax extender bill for most of this year. In April, the Senate Finance Committee approved a plan to renew several tax extenders for two years.
At the time of this writing, the House of Representatives and Senate plans were to be reconciled before a final bill was sent to the president for his signature.