NBAA Applauds Final Compromise Language in Congressional Tax Legislation

The National Business Aviation Association (NBAA) expressed support for the final version of tax legislation agreed to by House and Senate conference negotiators, specifically pointing to provisions that will help general aviation, which the NBAA has worked hard for years to achieve.

“We are pleased with the final tax legislation that emerged from negotiations between the House and Senate,” said NBAA President and CEO Ed Bolen. “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.”

The tax bill allows for immediate expensing of new and used equipment, a major victory for the general aviation industry advocated for by NBAA. Under current law, businesses can depreciate aircraft over five years, but the new legislation will allow businesses to write off those expenses in one year. For the aviation industry that will lead to increased sales, and allow more companies access to the competitive and other advantages of business aircraft use.

NBAA thanked Rep. Todd Rokita (R-4-IN) and Sens. Pat Roberts (R-KS), Jerry Moran (R-KS) and Jim Inhofe (R-OK) for their leadership on this issue.

The bill repeals “like-kind” exchanges for business property, which allowed businesses to defer taxes on sales of equipment, if they were purchasing new equipment. But NBAA believes that the new language on immediate expensing will offset that change, positioning the general aviation industry for growth.

Although immediate expensing would expire in 2022, with a phase-down until 2026, under the tax legislation, NBAA will work hard with a broad coalition to extend it, and will also work to reinstate like-kind exchanges of business equipment.

Another important win for the general aviation industry was the resolution of a nettlesome dispute over airline ticket taxes – under the tax legislation, business aircraft owners that hire a management company to provide support services will pay the non-commercial aviation fuel tax, as is specified in current law, and not the 7.5 percent airline ticket tax, bringing clarification to long-standing tax policy.

NBAA is pleased that the conference report will provide certainty to management companies that were under the threat of constant tax audits, and the danger of having to close their doors, because of ambiguity on the matter from the IRS. NBAA is grateful to Ohio Sens. Rob Portman (R) and Sherrod Brown (D), as well as Rep. Pat Tiberi (R-12-OH), for their leadership on this issue.

The legislation also lowers the corporate tax rate from 35 percent to 21 percent, and provides a new 20 percent deduction for pass-through businesses, among a host of other provisions.

Republican leaders on Capitol Hill are aiming for a vote on the overall bill in both the House and Senate next week, which would get it to President Trump for his signature before the holidays.