New Proposals Seen As Harmful To General And Biz Aviation
National Business Aviation Association President and CEO Ed
Bolen urged organization members Monday to contact their
congressional representatives and voice their opposition to two
proposals that could, according to NBAA, potentially prove very
harmful to the aviation industry.
The provisions -- included in the Senate version of the "Tax
Relief Act of 2005," a spending "reconciliation" bill approved last
week -- would expand limitations on entertainment use of business
aircraft to all employees, rather than just senior executives. A
second, broader provision, if approved, would substantially
increase taxes for some uses of a company aircraft.
Congress is expected to begin debate on the measure in
approximately two weeks, after representatives return from the
holiday break. NBAA's Bolen is encouraging the organization's
members to tell Congress how they feel, and the association has set
up a special link on their homepage for concerned operators to use
to send comments to Congress.
"NBAA's Members are critical to communicating the industry's
views with Congress," Bolen (pictured below) said.
"I urge all of our Members to voice their concerns about these
proposals with their members of Congress."
At first blush, perhaps, the change in wording isn't of much
concern. After all, tales of abuses of corporate aircraft are about
as old as the concept of corporate aircraft in the first place.
Images of CEOs travelling to the Bahamas onboard Gulfstreams paid
for their workers and investors have been on the minds of Americans
since, at least, the Enron scandal.
The Advocate Aircraft Taxation Company -- a business that
assists aircraft owners and operators in acquiring, maintaining,
and disposing of aircraft in a tax efficient manner consistent with
the FARs -- points out that the provision doesn't include
high-level executives, however, but ALL employees.
Moreover, as the
provisions are written the legislation would apply to any
corporate-owned aircraft, from a lowly Cessna 172 up to a Citation
X. While the legislation would help curb
Enron-esque "outrageous" uses of corporate aircraft, it would
also tax incidental use of such planes -- at least most, if not
all, of which is completely justifiable.
The provisions would also require an employer compute at year's
end the value of an employee's use of a company aircraft, including
both fixed and variable costs, and include those expenses on the
employee's payroll as income -- so the employee can then be
This, according to AATC, conflicts with Federal Aviation
Regulations that generally prohibit employers from seeking
reimbursement for flight expenses from an employee.