Federal Excise Taxes

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NBAA Federal Excise Taxes Guide

The NBAA Federal Excise Taxes Guide provides the latest information on how federal excise taxes (FET) apply to business aircraft activity. The guide includes details on how FET applies to commercial air transportation of passengers, including the percentage tax on domestic travel and related exceptions and exclusions, domestic segment fees, and the head tax on international transportation.

Key concepts including possession, command and control; available FET exemptions; and charter broker obligations for air transportation excise taxes are explained in the context of business aircraft operations. Rules on FET are constantly evolving and the guide includes updates on topics such as FET on fractional aircraft ownership program operations and IRS legal interpretations regarding aircraft service and pilot service agreements.

The Federal Excise Taxes Guide is a comprehensive but concise reference that provides NBAA Members with summary information about the applicability of excise taxes to common business aircraft operations and scenarios.

Download the NBAA Federal Excise Taxes Guide (725 KB, PDF)

If you have questions or feedback about the NBAA Federal Excise Taxes Guide or related topics, contact NBAA's Scott O'Brien at (202) 783-9451 or sobrien@nbaa.org.

FET News

Grassroots Advocacy Drives Legislation to Resolve Tax Policy on Aircraft Management Companies
November 14, 2014
A group of NBAA Members, led by several Ohio-based aircraft management companies, has been working with their representatives in Congress to introduce legislation clarifying that flights by aircraft owners with the assistance of a management company are non-commercial. "As an industry, we’re taking two parallel approaches to this issue," said Scott O'Brien, NBAA senior manager for finance and tax policy. "With the regulatory approach, we're talking to the IRS and Treasury Department in Washington and educating government officials about how aircraft management arrangements work. At the same time, we are supporting Member Companies in their legislative approach." Read more.
IRS Adjusts 2014 Air Transportation Federal Excise Tax Rates
November 27, 2013
The IRS announced inflation adjustments to the Federal Excise Tax (FET) rates on air transportation for 2014. The new rates take effect Jan. 1 and are valid for air transportation provided in calendar year 2014. The domestic segment fee is now $4.00; the international arrival/departure fee is $17.50 and the Hawaii/Alaska flight fee is $8.70.
IRS Suspends FET Assessments for Owner Flights on Managed Aircraft
May 20, 2013
On May 16, 2013, the IRS informally announced that it will suspend the assessment of Federal Transportation Excise Tax (FET) on owner flights on aircraft managed by aircraft management companies. NBAA has numerous resources available to keep members up to date on issues surrounding the IRS chief counsel advice (CCA) memorandum regarding the taxability of aircraft management fees. Learn More about FET Issues for Management Companies

FET Resources

Federal Excise Tax FAQs

FET Information for Aircraft Management Companies

Amendment to Tax Regulations Imposes FET on Single Member LLCs (705 KB, PDF)

Uninterrupted International Air Transportation - Which Legs of My International Trip are Subject to the 7.5% FET?

When are Commercial Transportation Taxes Due for Part 91 Flights?

Amendment to Tax Regulations Creates Federal Transportation Excise Tax Risks for Single Member LLCs

New Federal Excise Tax Liabilities for Whole Aircraft Operations Under FAR Part 91 and for Fractional Ownership

Federal Excise Taxes: The Regular Method Vs. the Alternative Method

Federal Excise Taxes: Deposit Safe Harbors and the Special September Deposit Rule

Aviation Fuel Taxes for Flight Departments: Understanding Fuel Taxes, Refunds and Credits

Fuel Fraud Update: Fuel Vendors Must Register With IRS to Ensure Funding of FAA Trust Fund

Credit for Fuel Used in Foreign Trade

Explanation of Non-Aircraft Use of Jet Fuel

Selected IRS FET Publications

IRS Publication 510 (Revised July 2012)

IRS Air Transportation Excise Tax Audit Technique Guide

DOT Rural Airports List for Federal Excise Tax Purposes

IRS Technical Advice Memorandum 200122006: Federal Excise Tax Segment Fees

IRS Technical Advice Memorandum 200123002: Affiliated Group

IRS Revenue Ruling 2002-50: Foreign Trade

IRS Revenue Ruling 68-256: Demonstration Flights