March 31, 2020

This information is intended to provide members with an introduction to certain provisions of the CARES Act. Readers are cautioned that this information is not intended to provide more than an introduction to the subject matter, and since the materials are necessarily general in nature, they are no substitute for seeking the advice of legal and tax advisors to address your specific business/personal needs.

The recent suspension of air transportation federal excise taxes (FET) that apply to commercial operations – including Part 135 operators – is an example of NBAA’s round-the-clock efforts to help mitigate the impact of the COVID-19 pandemic on the general aviation industry. As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which provides more than $2 trillion of relief to the economy, NBAA played a key role in securing the following excise tax relief provisions included in the legislation:

  • The federal air transportation excise taxes that apply to commercial operations (i.e., Part 135 flights) are suspended effective March 27, 2020, through Jan. 1, 2021.
  • The suspension of taxes is not retroactive and only applies to flights conducted after March 27, 2020.
  • The suspension includes all taxes that a commercial operator normally pays, including the 7.5% tax on amounts paid, applicable domestic and international segment fees and the 4.3 cents per gallon portion of the fuel tax (the 0.1 cents per gallon tax to fund the leaking underground storage tank fund is not included in the suspension).
  • Any business that was collecting or remitting these taxes before is covered by the suspension. For example, if an air charter broker collects and remits these taxes on behalf of an operator, the suspension would apply to them.
  • In addition to Part 135 operations, there are some Part 91 flights that the IRS deems commercial, such as timeshare flights. The suspension would apply to these flights as well.

In addition, the 6.25% tax on air transportation of property is suspended through Jan. 1, 2021.

“We urge our members to consult NBAA’s Federal Excise Taxes Guide for more details on how air transportation excise taxes are administered and to check our website frequently for new details as they become available,” said Scott O’Brien, NBAA senior director, government affairs. “While we understand the significant impact that the pandemic has had on operations, we are working relentlessly to make sure that relief for business aviation operators is included in the CARES Act and other economic stimulus efforts.”

O’Brien noted that NBAA was in the forefront of efforts to secure excise tax relief for general aviation commercial operators, which included a letter to congressional leadership, follow-up with individual U.S. House and Senate offices, and a call to action to affected NBAA members.

For more information, review NBAA’s coronavirus (COVID-19) resources and federal excise taxes resources.