The National Business Aviation Association (NBAA) recently expressed its support for the final version of the Congressional tax bill.
“We are pleased with the final tax legislation that emerged from negotiations between the House and Senate,” Ed Bolen, NBAA president and CEO, said. “For example, providing immediate expensing for new and used equipment, including business aircraft, was a priority for NBAA and will help provide the tools necessary to grow our economy.”
Business can depreciate aircraft over five years under the current tax law, but the new legislation will allow business to write off depreciation in one year. This is a major victory for the aviation industry, the NBAA said, because it will increase competitiveness and aircraft sales.
Immediate expensing will expire in 2022 and will be phased out through 2026.
The bill also repeals “like-kind” exchanges that allow businesses to defer the taxes on new equipment.
NBAA will work to extend immediate expensing and reinstate like-kind exchanges.
The bill also makes a change in the taxes aircraft owners pay. If the bill becomes law, owners who hire a management company to provide support services will pay the non-commercial aviation fuel tax and not the 7.5 percent airline ticket tax. The NBAA also considers this a major win.