Tax Cuts & Jobs Act Includes Key Provisions To Help Growth In General Aviation

The major impact of tax reforms on general aviation is the immediate expensing of new and used equipment. The new law permits 100-percent immediate expensing by the taxpayer for both factory new and pre-owned aircraft as long as it is the taxpayer’s first use of the aircraft.

Under the legislation, after 2022, there will be a phasedown of bonus depreciation in increments of 20% each year for qualified aircraft acquired and placed in service before 2027. Another resolution was the dispute over airline ticket taxes improperly imposed on aircraft management fees; the aviation fuel tax therefore will change from the current 7.5% federal transportation excise tax.

The legislation contains important changes for business aviation in several areas.

• 100-Percent Expensing (Bonus Depreciation)
• Like-Kind Exchanges
• Prohibition on Deduction of Employees’ Commuting Expenses
• Disallowance of Travel Expenses “Directly Related” to Business
• Repeal of Miscellaneous Itemized Deductions, Including Employee Business Expenses
• Transportation Excise Tax Does Not Apply to Owner Flights on Managed Aircraft

For more information on the Tax Reform and it’s impacts on Business Aviation, please visit www.nbaa.org/admin/taxes/federal/tax-reform-highlights-for-business-aviation.php