The US general aviation industry has breathed a collective sigh of relief following the passing of the bonus depreciation bill that will allow for accelerated depreciation of business aircraft.

The Small Business Lending Fund Act of 2010 contains a provision to allow bonus depreciation on equipment purchases this year, including general aviation aircraft, engines and avionics.

Aircraft purchased before the end of this year must be placed into service by the end of next year to qualify for bonus depreciation, which permits a business to accelerate 50% of the depreciable value of a capital investment in the first year instead of spreading it out over five years.

Bonus depreciation has boosted aircraft sales in previous years and is expected to do so this year.

"As the one tax provision we asked Congress to pass to help offset the decline in sales due to the recession, we are optimistic that the small business law will help to re-energise America's general aviation production lines and bring back lost jobs," says Pete Bunce, president of the General Aviation Manufacturers Association.

Source: Flight International