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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 (685 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 email@example.com.
- NBAA Legal Brief Asserts Need for IRS Consistency, Clarity on Federal Excise Tax
- Sept. 23, 2016
NBAA recently filed an amicus brief in the Fifth Circuit, challenging the IRS’s retroactive assessment of federal excise tax (FET) on aircraft management fees received by a fractional program. NBAA’s filing in the case involving Bombardier Aerospace, the prior owner of FlexJet, said the IRS never provided clear guidance on the application of FET to management fees. “NBAA got involved in this case because it is an example of the challenges businesses face when the IRS attempts to collect millions of dollars in retroactive taxes without clearly stating how the tax should apply,” said Scott O’Brien, NBAA senior manager of tax and finance policy. Read more about the tax case.
- IRS Releases Inflation Adjusted Federal Excise Tax Rates
- Jan. 4, 2016
The IRS has released inflation adjustments to certain air transportation taxes for calendar year 2016. The international head tax has increased to $17.80, while the domestic segment fee remains $4.00, the Alaska/Hawaii departure tax remains $8.90 and the percentage tax remains 7.5% on amounts paid for commercial air transportation of persons. NBAA’s Federal Excise Taxes Guide provides the most updated rates and is a comprehensive but concise reference the applicability of excise taxes to common business aircraft operations and scenarios. Review the NBAA Federal Excise Taxes Guide.
- NBAA Welcomes Legislation Resolving Federal Excise Tax Issues for Management Companies
- Sept. 25, 2015
NBAA welcomed the introduction of legislation that makes clear management services provided to assist an aircraft owner in the operation of its aircraft are not subject to the ticket tax imposed on commercial air transportation. Learn more.
- 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.
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