Bipartisan Bill Clarifies Tax Status For Aircraft Management Services

U.S Senators Sherrod Brown (D-OH) and Rob Portman (R-OH) have introduced legislation (S.2092) clarifying that aircraft management services are not subject to air transportation taxes.

The Brown-Portman bill is the companion legislation to H.R. 3608 introduced in the House last week by Representative Pat Tiberi (R-OH). The legislation is in response to a March 2012 IRS Chief Counsel opinion that concluded aircraft owners employing aircraft management services and allowing the use of the aircraft for occasional charter operations should assess the 7.5 percent commercial ticket tax on amounts paid for those management services. In May 2013, the IRS put the assessments on hold pending further clarifying regulations.

"NATA appreciates the leadership of Senators Brown and Portman in addressing this issue of great importance to aviation businesses," said NATA President and CEO Thomas L. Hendricks in a statement released to the media). Clarifying that aircraft management services are not subject to federal air transportation taxes will prevent the double-taxation of aircraft owners who seek to defray the costs associated with ownership through the chartering of the aircraft. We look forward to working with Senators Brown and Portman and their House counterparts to enact into law this common sense legislation.”

FMI: www.nata.aero