Contact: Dan Hubbard, (202) 783-9360, dhubbard@nbaa.org
Washington, DC, Dec. 18, 2015 – The National Business Aviation Association (NBAA) today welcomed passage of legislation extending bonus depreciation and Section 179 expensing as part of an overall omnibus appropriations bill, which passed on Dec. 18, as Congress adjourned for 2015. President Barack Obama is expected to sign the measure into law.
Among the many provisions that provide tax relief to families and businesses, those of most interest to NBAA and its membership include:
“While we are pleased that Congress has agreed to extend bonus depreciation with a five-year phase out, we continue to advocate for permanent bonus or permanent full expensing, which would promote greater investments in general aviation aircraft,” said Scott O’Brien, NBAA senior manager for finance and tax policy. “NBAA has repeatedly urged Congress to extend bonus depreciation so businesses have the certainty to invest in new assets. Last year, we joined a coalition of groups that successfully advocated for extending bonus depreciation for 2014.”
According to The Tax Foundation, a leading independent tax-policy research organization, permanently extending this provision would boost gross domestic product and wages by one percent, and create 212,000 new jobs due to its effects on the cost of capital. It would also increase federal tax revenues by $23 billion after taking into account the increases in wages and incomes.
Overall, American corporations took advantage of bonus depreciation for 67.2 percent of all of their investments. These companies were able to take an immediate $237 billion deduction on 50 percent of the cost of these investments, rather than spreading the deduction out over a number of years.
Both bonus depreciation and increased expensing limitations under Section 179 enables aircraft owners to better match the tax depreciation of an asset with its actual utilization. Additional depreciation is not allowed under the provisions; business owners are simply able to immediately deduct a larger portion of their capital investment. These incentives are available to owners of many capital assets and are not aviation-specific benefits.
Importantly, these provisions deliver long-term stimulus to industries like general aviation, which provides high-skill, high-paying jobs for more than 1.1 million Americans, and is responsible for generating $219 billion in economic activity in the United States annually. American companies also gain immediate access to the most advanced equipment, including aircraft, making them more competitive, while preserving jobs in aviation-related manufacturing, one of the few industries that contributes positively to America’s trade balance.
Review NBAA’s resources on bonus depreciation, including an article outlining bonus depreciation.
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Founded in 1947 and based in Washington, DC, the National Business Aviation Association (NBAA) is the leading organization for companies that rely on general aviation aircraft to help make their businesses more efficient, productive and successful. The association represents more than 10,000 companies and provides more than 100 products and services to the business aviation community, including the NBAA Business Aviation Convention & Exhibition, the world’s largest civil aviation trade show. Learn more about NBAA at www.nbaa.org.
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