August 4, 2011
By Kerry Lynch
Business aviation advocates were relieved that this week’s votes on the debt ceiling excluded user fees and changes to corporate aircraft depreciation schedules, but warn that such tax changes still may lie ahead.
The Senate on Aug.2 approved a bill to raise the $14.3 trillion debt ceiling, following a House vote a day earlier. But the bill also calls for a special joint committee to develop $1.5 trillion in deficit reduction and revenue raisers by late November.
“The recent negotiations over the debt ceiling have included rhetoric and policy proposals that have alarmed the business aviation community,” says National Business Aviation Association President Ed Bolen. “Remarks denigrating companies that rely on business aviation have been used to revive proposals for onerous user fees and impromptu changes to aircraft tax policy.”
A number of congressional leaders, along with the White House, have discussed possible lengthening of the corporate aircraft depreciation schedules from five years to seven years to match those of commercial aircraft. In addition, a number of non-specific proposals were floated in recent weeks discussing new and increased aviation fees, including an air traffic control user charge of anywhere between $25-$100.
Business aviation advocates fear that those fees may still be on the table as congressional leaders spend the next several months developing proposals to reach their goal of $1.5 trillion in savings.
“Our industry could once again be targeted for new tax or user fee proposals. More battles are likely ahead,” Bolen says.
“We definitely have not heard the last of a user fee scheme or the prospect of eliminating the popular tax depreciation plan for buyers of new aircraft and avionics,” adds Aircraft Electronics Association President Paula Derks. “We certainly are cautious that lawmakers may try to include that language yet this fall.”
Source: AVIATION WEEK