Capital Investment Incentives on Fast Track
December 16, 2015
After a long wait, the aviation industry can look forward to some much-needed certainty on bonus depreciation, Sec. 179 expensing, and the research and development (R&D) tax credit.
Late on Dec. 15, House and Senate leaders released the details of a year-end tax and budget deal that accomplishes several of ARSA’s policy priorities. Among other things, as described below, the Protecting Americans from Tax Hikes (or PATH) Act would reinstate bonus depreciation, and permanently increase higher Sec. 179 expensing levels and the R&D tax credit. While the tax and budget deal is not yet law, Congress is set to approve it this week and President Obama is expected to sign it shortly thereafter.
Bonus Depreciation. The PATH Act extends bonus depreciation for new property acquired and placed in service during 2015 through 2019. The bonus depreciation amount is 50 percent for property placed in service during 2015, 2016 and 2017 and phases down to 40 percent in 2018 and 30 percent in 2019. The deal continues to allow taxpayers to elect to accelerate the use of alternative minimum tax (AMT) credits in lieu of bonus depreciation under special rules for property placed in service during 2015. The provision also modifies the AMT rules beginning in 2016 by increasing the amount of unused AMT credits that may be claimed in lieu of bonus depreciation.
Sec. 179 expensing levels. The PATH Act permanently extends the small business expensing limitation and phase-out amounts in effect from 2010 to 2014 ($500,000 and $2 million, respectively). It also modifies the expensing limitation by indexing both the $500,000 and $2 million limits for inflation beginning in 2016.
R&D tax credit. The PATH Act also makes the R&D tax credit permanent. The bill also makes some changes to the law. Starting in 2016, companies with less than $50 million gross receipts can claim the credit against AMT liability and, in certain cases, against payroll tax (FICA) liability.
A section-by-section explanation of the tax bill from the House Ways & Means Committee is here. The full text of the legislation is here.
Stay tuned to ARSA for further updates and more detailed analysis of both PATH Act and the omnibus appropriations bill.
More from ARSA
First Part 145 Session On Demand, Live Sessions Continue
In July and August, ARSA is administering a series of online training sessions combining to walk through every section of 14 CFR part 145, “Repair Stations.” The new series replaces…Read MoreARSA Remembers – Dave Harrington
Colonel David R. “Dave” Harrington , a decorated Air Force pilot, Distinguished Flying Cross recipient, former FAA Flight Standards Service director, husband, father, Pop Pop, and friend, died peacefully on…Read MoreOn Demand Workshop – It All Starts with the Law
June 30, 2026 | Categories:
ARSA News & Updates, ARSA Works, FAA, Maintenance, Operations, Regulatory, Training
The recording of ARSA’s special workshop providing the regulatory and statutory foundation for compliance is available on demand. The resource was presented to FAA personnel as part of the association’s…Read More
