Tax insight

Aircraft Quarterly Newsletter – Q2 2025

Insight
5 minute read
June 25, 2025

What happened?

First, the One Big Beautiful Bill (OBBB) working its way through Congress provides for 100% bonus depreciation for property acquired and placed in service after January 19, 2025. The House version of the bill generally would apply only to property acquired and placed in service before January 1, 2030, but the Senate version would make the provision permanent.

Second, the trade policy landscape continues to shift rapidly, driven by ongoing tariff negotiations and public statements.

Third, Washington state recently enacted legislation that levies an additional 10% “luxury aircraft tax” on the sale price of a noncommercial aircraft over $500,000, or the fair market value of leased noncommercial aircraft over $500,000 at the inception of a lease.

Why is it relevant?

First, the effects of the change in bonus depreciation must be recognized in the period in which the law is enacted and reported as a component of the income tax provision relating to continuing operations.

Second, tariffs resulting from shifts in the trade policy landscape may have a significant impact on the business aircraft industry.

Third, Washington’s new aircraft luxury tax legislation levies a corresponding tax for the privilege of using a noncommercial aircraft in the state equal to 10% of the value of the aircraft that exceeds $500,000.

Actions to consider

Companies electing bonus depreciation will need to carefully evaluate how the provision may affect their existing financial statement positions and disclosures to appropriately account for the changes in the period of enactment.

Taxpayers looking to purchase business aircraft should continue to stay current on evolving tariff actions and any potential changes that could impact their aircraft acquisition.