The US House of Representatives has passed new legislation that will make it more financially viable for small businesses to purchase General Aviation aircraft and components.
Under the final version of the Small Business Jobs Act of 2010, which was passed by the House today, businesses that purchase GA aircraft and components such as engines and avionics can take advantage of a bonus depreciation tax incentive.
The bonus depreciation provision allows a business that purchases a
GA aircraft to deduct the normal depreciation allowance as well as an
additional 50 per cent of the depreciable value of the aircraft in the
first year after delivery, instead of spreading it out evenly over five
years.
This tax incentive is a proven way to help increase aircraft sales, with one GA manufacturer reporting that bonus depreciation accounted for 55 per cent of all piston airplane sales in 2009.
The General Aviation Manufacturers Association (GAMA) says this critically important legislation will help drive new sales for manufacturers as they continue to recover from the recession.
“We are pleased that the House acted so quickly to pass the final version of this important legislation,” GAMA’s President and CEO Pete Bunce said. “A quick signature from President Obama will allow operators to take advantage of this provision before the end of the year.
“As a proven stimulus to increase sales, we are optimistic that an extension of bonus depreciation will help re-energise an industry that continues to struggle with slowed production lines and diminished customer demand.”
To state the obvious, here in Australia we could certainly use government incentives such as this to boost our struggling GA industry. And perhaps that’s part of a possible solution to that ageing aircraft issue CASA is looking into.