December 12, 2017 The Honorable Orrin Hatch The Honorable ...

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new and used business equipment as proposed in Section 3101 of the ... manufacturing to agriculture, also support immedi
December 12, 2017 The Honorable Orrin Hatch Chairman Senate Finance Committee 219 Dirksen Senate Office Building Washington, DC 20510

The Honorable Kevin Brady Chairman House Ways & Means Committee 1102 Longworth House Office Building Washington, DC 20515

Dear Chairman Hatch and Chairman Brady: On behalf of the general aviation community, we are writing to express our support for immediate expensing of new and used business equipment as proposed in Section 3101 of the House-passed “Tax Cuts and Jobs Act.” We are deeply concerned about the implications of the Senate version of the tax reform bill on aircraft values, the stability of the secondary market for used aircraft, as well as job losses in the market for such aircraft. As differences between the House and Senate tax reform bills are debated during the conference process, it is critical to support the House provision that allows businesses to immediately expense qualifying new and used equipment. Limiting immediate expensing to only new equipment will delay pre-owned transactions, and companies will hold used equipment longer to avoid negative tax consequences. In addition, with the repeal of like-kind exchanges for business equipment in the House and Senate tax reform bills, immediate expensing for used assets is even more important. Without like-kind exchanges as a planning tool, and no opportunity for immediate expensing, transactions involving used equipment will be much less attractive. Immediate expensing of new and used equipment makes sense, and the Tax Foundation found it could grow the U.S. economy by 4.2 percent and generate more than 800,000 jobs. Diverse segments of the economy, from manufacturing to agriculture, also support immediate expensing because of its proven record of generating economic growth. With a U.S. general aviation fleet of more than 200,000 aircraft, there are significant opportunities for preowned transactions, and under the House bill, aircraft owners would be encouraged to conduct transactions with immediate expensing. While the used aircraft market has been challenging for many years, immediate expensing would allow the market to grow at a faster pace, leading to job growth and economic activity. The general aviation industry is a key economic driver supporting 1 million jobs and generating more than $200 billion in economic impact. Our industry has seen how immediate expensing can incentivize aircraft buyers, and expanding the provision to include used equipment will deliver additional economic benefits. We urge you to support the House approach to immediate expensing which covers both new and used equipment and will generate economic growth in all segments of our economy. Sincerely, Aircraft Owners and Pilots Association Helicopter Association International National Air Transportation Association National Business Aviation Association