Federal Excise Tax Update
The IRS has issued final regulations that specify aircraft owners flying on their own business aircraft under Part 135 are exempt from 7.5% federal excise tax (FET). Previously, all charter transportation charges were subject to FET. With this rule change, aircraft owners will have flexibility to choose how to operate their aircraft in a tax neutral manner.
In some locations, aircraft owners can also realize state sales and use tax and personal property tax savings when flying under Part 135. If your aircraft is on a 135 charter certificate, or you are considering placing an aircraft on a charter certificate, please contact us for additional guidance.
