NBAA recently welcomed a vote by the U.S. House of Representatives to make several small-business tax provisions permanent, including the ability to expense up to $500,000 in capital investments.
The “small-business expensing provision” encourages investments in equipment, such as aircraft parts, up to a certain value by not subjecting them to standard depreciation. Instead, they may be expensed in the year they are purchased, similar to many other business expenses.
This small-business expensing allowance has been increased steadily since 2003, rising from $25,000 to $500,000 in 2014. The provisions have been temporary, however, and on New Year’s Day, the amount reverted to $25,000 for the 2015 tax year.
America’s Small Business Tax Relief Act of 2015, which was sponsored by Rep. Pat Tiberi (R-12-OH) and approved by the House Feb. 13, would set the limit at $500,000 and index it to inflation going forward.
“NBAA welcomes progress on key issues, such as more flexible tax provisions, which encourage small businesses to invest and strive for growth,” said NBAA President and CEO Ed Bolen. “Making the small-business expensing provision a permanent fixture of the tax code will stimulate growth for the many small businesses that help general aviation generate $219 billion in annual U.S. economic activity.”
Rep. Tiberi was one of the main supporters of a bill in the last Congress that would have made bonus depreciation permanent, and NBAA is urging lawmakers to revisit the issue during the 114th Congress. NBAA also is calling on Congress to reject the Obama Administration’s provision in its fiscal year 2016 budget request to lengthen the tax-depreciation period for business aircraft from five years to seven.