The General Aviation Manufacturers Association (GAMA) said the U.S. Congress passed 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.
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%, then slides to 30% depending on when the aircraft is put under contract and when it is placed into service.
“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,” said Pete Bunce, GAMA president and CEO. “The longer time horizon of this bonus depreciation extension will provide manufacturers and our customers greater utilization of this important manufacturing tax incentive.”
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