Officials at the General Aviation Manufacturers Association (GAMA) said they are very pleased by the bill introduced yesterday by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) that would extend bonus depreciation for businesses that purchase general aviation aircraft in 2010.
“Bonus depreciation is a powerful incentive to purchase a GA aircraft and is proven to increase sales during difficult economic conditions,” said Pete Bunce, GAMA’s president and CEO. “It is the one tax provision we have asked Congress to pass to help offset the decline in sales due to the recession and bring back lost jobs.”
Bonus depreciation was enacted as part of the 2008 economic stimulus efforts and was extended through the end of 2009 in the American Recovery and Reinvestment Act. Bonus depreciation allows a business to deduct an additional 50% of the depreciable value in the first year instead of spreading it out over five years. This incentive has little to no impact on the federal deficit, but it does have a very positive effect on sales. In fact, one GA manufacturer reported that bonus depreciation accounted for 55% of all piston sales in 2009. “If enacted into law, this bill will be crucial in helping the GA manufacturing industry get back on its feet and put Americans back to work,” Bunce said.
