March 13, 2013
A longtime NBAA Member is speaking out against a “counterproductive” proposal by the Obama administration to target business aviation with changes to tax-depreciation schedules on the purchase of aircraft.
In an online piece published this month by Forbes magazine, Louis Seno, chairman emeritus of JSSI (Jet Support Services Inc.), argues that the proposal would do little to cut government red ink, but could impede the business aviation industry’s gradual recovery from the 2008 economic downturn.
“What I see is yet another stumbling block out of Washington that has the potential to hurt the 1.2 million people who make their living, building and servicing these valuable business assets,” Seno wrote.
Read: “Is the Obama Depreciation Plan Counterproductive? You Betcha!”
“Depreciation” refers to the amount and timing of tax payments for companies using general aviation airplanes. Under requirements defined by the IRS decades ago, and codified into law by congress in 1986, aircraft owned and operated by a company for business use are depreciated over five years. The Obama administration proposes to change that schedule to seven years, even though economists have noted that shorter depreciation schedules help incentivize the purchase of business assets. That means moving to a longer schedule would remove such an incentive, driving down demand for business aircraft purchase, and impacting manufacturing jobs in the process.
“The current methodology has been working for the better part of three decades,” said Seno, who became “frustrated” when he learned of the Obama administration’s proposal two years ago. When Forbes asked him recently to write about it, he jumped at the chance to increase awareness of the issue.
“Our fragile industry is just starting to come out of the doldrums,” he said. “Anything that would kill that, I am against.”
Calling himself a “diehard believer in business aviation,” Seno has spent 35 years in the industry, much of it in financing. In 1989, he helped found Chicago-based JSSI, now the world’s largest independent provider of hourly cost maintenance programs for aircraft engines and airframes. He is a former senior manager at Boeing Capital Corp. and GE Capital Solutions and has served with several NBAA groups, including the Association’s Tax Committee.