The aviation community has reason for optimism as new developments suggest that 100 percent bonus depreciation, one of the most powerful tax incentives for aircraft acquisition, could be extended indefinitely, creating unprecedented financial planning opportunities for both jet and piston aircraft owners and buyers.
Current Law Phase-Down
Under the Tax Cuts and Jobs Act (TCJA), bonus depreciation has been on a scheduled phase-down path. After allowing businesses to deduct 100 percent of qualified asset costs in the year of acquisition through 2022, the benefit began diminishing. Bonus depreciation is set to drop to 40 percent in 2025, 20 percent in 2026, and disappear entirely by 2027.
For aircraft owners contemplating new purchases, this declining benefit has created a sense of urgency and uncertainty around acquisition timing.
This scheduled reduction has particularly impacted decisions around fleet updates and expansions, forcing many operators to accelerate purchase plans to maximize tax advantages before they diminish further.
Proposed Reinstatement to 100%
The landscape is now shifting dramatically. As part of the so-called “Big, Beautiful Bill” reconciliation effort, both House and Senate drafts include provisions to restore 100 percent bonus depreciation for property placed in service after January 19. This reinstatement would extend through approximately 2029, with certain long-production assets potentially eligible through 2030.
The Senate draft explicitly includes this reinstatement and applies it retroactively from January 19, creating a clear timeline for aircraft acquisition planning. This represents a significant reversal of the phase-down trajectory and opens new windows of opportunity for strategic aircraft investments.
Why It Matters for Aircraft Owners
The implications for aircraft owners and buyers, from single-engine piston operators to corporate jet fleets, are substantial. The immediate write-off of capital expenses provides an enormous cash flow boost, enhancing liquidity precisely when businesses are making significant investments in aviation assets.
From an economic perspective, analyses from the Congressional Budget Office and Congressional Research Service estimate that extending 100 percent expensing through 2034 could cut taxes by approximately $378 billion while boosting private investment by roughly 1.5 percent. This translates to an estimated 0.3 percent increase in GDP by 2034. The Tax Foundation projects an even more optimistic outlook with a 0.6 percent long-run GDP increase, though they caution that trade-related headwinds may partially offset these gains.
For aircraft owners specifically, this economic stimulus creates a favorable environment for fleet modernization, technology upgrades, and expansion. All of this comes with significant tax advantages that improve return on investment calculations.
Ongoing Discussions of Permanence
While the current proposals extend 100 percent bonus depreciation for several years, the conversation has evolved to include making this benefit permanent. Policy think tanks and tax experts, including the Tax Foundation, have explored proposals for permanent 100 percent bonus depreciation, noting it would be “economically powerful” with significant long-term GDP benefits.
In March, President Trump publicly pledged during a congressional address to restore 100 percent bonus depreciation permanently, starting retroactively from January 2025. This political momentum suggests the possibility of a more stable, predictable tax environment for long-term aviation investment planning.
The Congressional Budget Office has cautioned that a permanent provision would result in ongoing revenue losses, projected at $91 billion in net interest over 2025–2034, in addition to direct revenue losses. This fiscal impact creates a central tension in the policy debate:
- A permanent policy offers strong pro-growth potential but comes with longer-term revenue and deficit implications
- Temporary extensions provide easier budget scoring but risk creating economic uncertainty with sunset and renewal cycles
For aircraft owners, the distinction is crucial. A permanent provision would eliminate the cycle of uncertainty that has characterized bonus depreciation policy, allowing for more confident long-term fleet planning and investment strategies.
What This Means for Your Aircraft Decisions
The potential indefinite continuation of 100 percent bonus depreciation represents a paradigm shift for aircraft ownership economics. Whether you operate piston aircraft for business use, or manage a corporate jet fleet, the ability to immediately deduct the full purchase price creates powerful incentives for acquisition and modernization.
While these provisions remain part of congressional negotiations, with final details, timelines, and offsets still under discussion, the bipartisan support for reinstating full bonus depreciation suggests a high likelihood of implementation in some form. If you are considering an aircraft purchase in the future and need assistance with financing, contact FLYING Finance to get the process started.
Aircraft owners and operators should closely monitor these legislative developments, as the timing of aircraft transactions relative to policy implementation dates could significantly impact financial outcomes. The difference between 40 percent bonus depreciation under current law and a restored 100 percent benefit represents substantial tax savings that directly improve the economics of aircraft ownership.
