Federal Taxes
Federal Excise Taxes
Both private and commercial business aircraft operators pay Federal excise taxes (FET) either on fuel or on the transportation of persons or property. This section provides information on FET applicability, current tax rates, and best practices for collecting and remitting the tax. Learn More
Depreciation
Aircraft that are owned and operated by businesses are often depreciable for income tax purposes under the Modified Accelerated Cost Recovery System (MACRS) or the Alternative Depreciation System (ADS). Learn More
Passive Activity Loss
Individual taxpayers must aggregate the income and loss from their passive activities each year to determine their net passive income or loss. A net passive loss for the year generally is nondeductible for that year but may be carried forward to reduce net passive income in future years. Learn More
Charitable Flights
Many businesses generously make their aircraft available for charitable flights. Prior to doing so, it is important to know the FAA and IRS rules applicable to these flights and any tax deductions the company might want to take associated with the contributions. Learn More
Federal Tax News
- Court Case Provides Insight on Hobby-Loss Rules
- November 28, 2011
One of many different ownership structures used by people and companies who operate aircraft for business is a separate leasing company, which is a separate legal entity that leases the aircraft to one or more businesses. Due to depreciation rules, the entity owning the aircraft often shows a loss for tax purposes. In recent years, IRS auditors have tried to disallow deductions due to these losses because of "hobby-loss" rules. Recently, a court case held that business aircraft operations were considered part of a "unified business enterprise" and thus were not subject to hobby-loss rules. Learn more. - NBAA Committee Meets With IRS to Advance Federal Tax Initiatives
- June 27, 2011
Representatives from NBAA’s Tax Committee met with more than a dozen senior-level officials from the Internal Revenue Service (IRS) to address a variety of tax challenges that affect business aircraft owners and operators. The Tax Committee representatives discussed the status of specific rulemaking efforts for which NBAA had offered substantive comments and the impact of several IRS rules, including the tax penalty associated with charitable flights and traps for the unwary associated with certain ownership and leasing structures. NBAA urged the IRS to carefully consider the industry’s perspective and take action on these rulemaking initiatives. Review NBAA's Federal Tax Regulatory Initiatives (146 KB, PDF).
