GAMA Tax Extensions
GAMA Praises U.S. Congress for Funding Important Aviation Priorities and Tax Extensions
The General Aviation Manufacturers Association (GAMA) today thanked the U.S. Congress for passing an omnibus measure that includes key funding priorities for general aviation manufacturers in safety, certification, and alternative fuels for piston-engine aircraft, makes permanent the Research & Development (R&D) tax credit, and extends bonus depreciation for five years. The bill, which now heads to President Obama for his signature, will fund the U.S. government through September 30, 2016.
The measure provides $1.25 billion for aviation safety, including full funding for the FAA’s certification activities, as requested by the Obama Administration. In addition, the legislation directs the FAA to “continue its efforts to more fully utilize Organization Designation Authorization (ODA) for aircraft certification processes, while improving ODA risk-based oversight and workforce training,” and report to Congress on its progress.
Furthermore, the bill provides $7 million—$1 million more than the Administration requested—to fund the Piston Aviation Fuels Initiative, which will support a comprehensive testing program to move toward unleaded alternative fuels to the 100 low-lead aviation gas currently used in piston-engine aircraft.
Of particular importance to aerospace manufacturers, the measure permanently extends the R&D tax credit, and in 2016 will allow businesses that bring in $50 million or less in gross receipts per year to potentially claim the credit against their Alternative Minimum Tax or employer payroll tax liability. The legislation also extends bonus depreciation for aircraft bought and placed into service from 2015 to 2020. The rate starts at 50 percent, then slides to 30 percent depending on when the aircraft is put under contract and when it is placed into service.
“We appreciate the strong support shown by Congress in this omnibus measure for general aviation, especially in the critical areas of safety, certification, and the transition to an unleaded avgas,” GAMA President and CEO Pete Bunce said. “Making the R&D tax credit permanent is a huge deal and will help manufacturers continue to develop and deliver innovative and advanced safety-enhancing products and spur greater technological development for hybrid and electric propulsion. The longer time horizon of this bonus depreciation extension will provide manufacturers and our customers greater utilization of this important manufacturing tax incentive.”
