Companion Bill In The U.S. Senate Introduced By Senator Sherrod Brown(D-OH)

Representative Pat Tiberi (R-OH) reintroduced bipartisan, bicameral legislation (H.R. 896) Monday clarifying that aircraft management services are not subject to air transportation taxes. A companion bill was introduced in the U.S. Senate by Senator Sherrod Brown (D-OH) Tuesday.

Similar legislation was approved by the House Committee on Ways and Means last July. The lawmakers’ initiative is in response to a March 2012 IRS Chief Counsel opinion that concluded aircraft owners utilizing aircraft management services who also allow the use of the plane for occasional charter operations should have the 7.5 percent commercial ticket tax assessed on amounts paid for those management services. In May of 2013 the IRS put the opinion on hold pending further clarifying regulations. 

In a statement released to the media, NATA president Martin H. Hiller said the association deeply appreciates the work of Representative Tiberi and Senator Brown to advance legislation that is so important to numerous small aviation businesses vulnerable to potentially enormous IRS assessments. "These leaders understand the position the IRS took in 2012 represents double-taxation on aircraft owners who may seek to defray the costs associated with ownership through the chartering of the aircraft when it is not in use," Hiller said.

"The Joint Committee on Taxation has previously reviewed the Tiberi/Brown bills and determined addressing the IRS’s misapplication of the ticket tax costs the taxpayer nothing while removing considerable uncertainty for small businesses and aircraft owners alike. We urge the Ways and Means and Finance Committees to include these bills in the comprehensive tax legislation currently under development in Congress."

(Source: NATA news release)

FMI: www.nata.aero