Tax breaks will boost general aviation industry

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Dec. 14--General aviation trade groups are urging Congress to quickly pass a tax agreement that they say will boost the industry by doubling the federal tax break for businesses making capital investments.

That could help increase business jet sales, officials say.

"These proposals are extremely well-targeted to create jobs, stimulate innovation and get production lines moving again at manufacturing plants," Pete Bunce, CEO and president of the General Aviation Manufacturers Association, said in a statement.

GAMA and the National Business Aviation Association support the changes.

The tax proposal, first outlined by the White House, would permit 100 percent depreciation of capital investments by businesses during 2011, retroactive from Sept. 8, 2010.

It also would include accelerated or "bonus" depreciation of 50 percent during 2012. A bonus depreciation extension through the end of this year has already been signed into law.

Purchases include aircraft, engines, avionics and other upgrades. Because of longer lead times, buyers of non-commercial aircraft will have an extra year to put the plane in service and qualify for the extra depreciation.

An extension of bonus depreciation at the end of the year has given Cessna Aircraft "a little shot in the arm," said Cessna president and CEO Jack Pelton.

"If they can get this 100 percent bonus depreciation in the tax bill for 2011, those are all things that are helpful and supportive of our industry," Pelton said.

A second provision in the proposal is a two-year extension of a research and development tax credit. Its extension will encourage technical advancements and sustain economic growth in the industry, GAMA said.

"We believe the expensing provision will encourage sales of airplanes, engines and avionics in a market that continues to experience a very slow recovery from the recession," Bunce said. "It will also benefit companies and employees of maintenance and completion centers that overhaul aircraft and install equipment."

The Treasury Department has said that the proposed plan would stimulate $50 billion in corporate spending and $150 billion in tax cuts from 2 million businesses.

It also has said that the government would recoup much of the tax savings over time because of the additional spending, costing the federal government less than $30 billion.

The proposals are part of a tax deal hammered out by the White House and Republicans that, if passed, would extend Bush-era tax cuts for two years, extend unemployment for 13 months and create a payroll tax holiday.

The Senate has mustered the 60 votes necessary for the measure to pass, the National Journal said Monday. Passage would send the bill to the House of Representatives.

Contributing: Dan Voorhis of The Eagle. Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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