Jan. 5, 2021

With the excise tax suspension enacted as part of last year’s massive Coronavirus Aid, Relief, and Economic Security (CARES) Act now expired, NBAA has released an updated Federal Excise Taxes Guide to help taxpayers understand how federal excise taxes (FET) apply to this year’s business aircraft activity.

As the guide details, the IRS’s 7.5% tax on amounts paid for the transportation of a person by air returns for payment made in 2021, as does the $4.30 domestic segment fee. International head tax meanwhile increases to $19.10, while the Alaska/Hawaii fee grows to $9.60.

Review NBAA’s updated 2021 Federal Excise Taxes Guide.

“The Federal Excise Taxes Guide is a concise and comprehensive tool that helps aircraft owners, flight departments and charter operators understand the intricacies of FET and how to properly collect and remit the tax,” said NBAA Senior Director, Government Affairs Scott O’Brien.

The guide also includes updates on topics such as FET on fractional aircraft ownership program operations, IRS legal interpretations regarding aircraft service and pilot service agreements and how to apply or remit FET.

The reinstatement of FET is only one feature of the 2021 tax season. To understand how the CARES Act and business tax changes impact future tax planning, visit NBAA’s informative Virtual Aviation Tax & Transactions Review.

Taxpayers may still benefit from the CARES Act’s suspension on FET, as payments for air transportation made in 2020 may be free from FET for flights taken in subsequent years. More details can be found in NBAA’s extensive tax issue resource.