Private Aircraft, Tax Cuts and Jobs Act
On December 22, 2017, the President of the United States signed The Tax Cuts and Jobs Act. Currently, the federal government imposes an excise tax on every commercial flight. Under this new legislation, the maintenance of a privately managed and operated plane would be exempt from this tax.
Below is the section of the bill which describes the tax breaks for aircraft owners:
“The proposal exempts certain payments related to the management of private aircraft from the excise taxes imposed on taxable transportation by air. Exempt payments are those amounts paid by an aircraft owner for management services related to maintenance and support of the owner’s aircraft or flights on the owner’s aircraft.
Applicable services include support activities related to the aircraft itself, such as its storage, maintenance, and fueling, and those related to its operation, such as the hiring and training of pilots and crew, as well as administrative services such as scheduling, flight planning, weather forecasting, obtaining insurance, and establishing and complying with safety standards. Aircraft management services also include such other services as are necessary to support flights operated by an aircraft owner.”