US tax-cut legislation passed by Congress last month includes a bonus depreciation measure to stimulate sales of capital goods, including aircraft. The measure increases the depreciation allowed in the first year from 30% to 50% of the purchase price. The General Aviation Manufacturers Association (GAMA) and the National Business Aviation Association lobbied for the increase, and extension of the allowance.
"The increase in the first-year depreciation allowance should be a big boost to general aviation...a real incentive to buy aircraft now," says GAMA chief executive Ed Bolen. The original 30% bonus depreciation allowance, introduced after the 2001 terror attacks, was due to expire on 11 September 2004. The new measure extends its applicability to 1 January 2005.
To qualify, there must not have been a binding contract in place before 6 May and the aircraft must enter service before 1 January 2005.
Source: Flight International
