Senate passes bonus depreciation bill; would give lump tax deduction on aircraft, other business purchases

As part of a proposed federal plan to help business with purchases and approach recovery from the Great Recession, the Senate passed a bill Friday that would allow a lump tax deduction on depreciation on items including aircraft in the first year instead of spreading the write-offs across a five-year span.

Business aviation groups such as the NBAA and NATA support the measure, dubbed the Bonus Depreciation to Create Jobs Act. It still needs House approval to become law. NATA listed the bill among its 2010 priorities.

Bill went through both houses to the president's desk and was signed into law in a week. Updates after the jump. [more]

NBAA CEO Ed Bolen applauded its passage on the organization's web site.

"Accelerated depreciation is a proven investment incentive, and could significantly benefit the business aviation community," he said. "The industry continues to grapple with a slow recovery from the drop-off in flight activity and aircraft sales, as well as job losses in this challenging economic climate."

UPDATE: (Sept. 23) The depreciation bill now has House approval, as members of Congress approved it Thursday, Sept. 23. The bill now goes to conference between both congressional bodies before heading to the White House for approval.

Earlier this year, NBAA joined with more than 80 American businesses and organizations to send an open letter to House and Senate leaders calling for a renewal of bonus depreciation that expired at the end of 2009. It would extend the tax benefits to preserve manufacturing jobs, and at the same time give companies immediate access to the benefits of asset investments, including the purchase of business aircraft. NBAA President Bolen applauded the most recent step toward the extension in a statement on the NBAA web site.

"NBAA is pleased that Congress has affirmed its support for accelerated depreciation through the passage of this legislation," said NBAA President and CEO Ed Bolen. "Once the President signs the bill including bonus depreciation into law, companies will be able to take advantage of the provision right away, giving them access the benefits of business aviation."

UPDATE 2: (Sept. 27) A week after passing the Senate and fours days after passing the House, the depreciation bill has been signed into law by President Obama. Read more from the NBAA here.