Topline
A little-discussed portion of the billionaire President Donald Trump’s “Big Beautiful Bill" hands a lucrative break to ultrawealthy Americans in the form of a tax policy for private jet purchases.
An under-the-radar provision of Trump’s spending bill lands a massive potential tax advantage for ... More
Part of the spending package that just passed the Senate is the permanent restoration of the 100% “bonus depreciation” federal law, which allows businesses to write off the full amount of qualifying items in the year of purchase.
Bonus depreciation was originally a part of the Tax Cuts and Jobs Act of 2017, but phased down from the 100% level beginning in 2023 and was set to permanently expire by 2027, according to Thomson Reuters.
The bonus depreciation policy applies to a slew of qualified, physical business expenses which depreciate over time, such as machinery and company cars, but the policy is often associated with big-ticket luxury items, such as private aircraft, and its institution last decade led to a boom in jet sales.
That means that unlike standard business accounting procedures in which capital investments are spread across multiple years and are never fully written off, the full value of qualified property could be written off year one.
A $10 million plane could now be a $10 million deduction in that same year, noted the aviation industry publication Flying magazine.
“For someone interested in buying a jet, whether new or used, this is a very big deal,” Matthew Bere, managing director of aviation at the Oklahoma-based bank BOK Financial, said this week, saying he expects the megabill’s passage to “spur a lot of activity in aircraft sales.”
This is an “example of oligarch friendly rules,” says Chuck Collins, director of the Program on Inequality and the Common Good at the Institute for Policy Studies progressive think tank. Collins described the bonus depreciation provision as a “massive tax break for billionaires and centi-millionaires” from the “private jet lobby” in a Tuesday post.
$378 billion. That’s how much the permanent establishment of 100% bonus depreciation would cost taxpayers over 10 years, according to Congressional Budget Office estimates.
“The all-at-once tax deduction could potentially reduce” jet buyers’ taxable income by “millions of dollars in a given year,” explained Bere.
The version of Trump’s “Big Beautiful Bill” passed by the House in May only extended the 100% bonus depreciation through 2029, while the Senate made the deduction permanent. The private aviation industry celebrated the change, and charter plane provider FlyUSA described the legislation as “a power-packed provision that could change the game for private aircraft acquisition.”
The private jet friendly bonus depreciation provision adds to heavy criticism from Democrats and nonpartisan watchdogs who say the bill will disproportionately help the rich and hurt the poor. The bill will lower the lowest 20% of American earners’ incomes by 2.9% while the top 1% of earners will get a 1.9% boost, according to the Yale University Budget Lab. “This bill gives another tax break to the ultrawealthy — so they can buy another private jet,” Sen. Mark Kelly, D-Ariz., said this week. Environmental groups frequently criticize private jet usage for its outsized emission, and U.S. departures account for 65% of private jet flights globally, according to the International Council on Clean Transportation.
Kyle Khan-Mullins and Lily Ogburn contributed reporting.