Non-Business Use of Employer-Provided Aircraft

Occasionally a business aircraft is made available to employees for reasons not directly related to the business of the company. Aircraft operators must be familiar with the complex tax, regulatory and recordkeeping implications of these flights.

News

Management: Policies for Personal Use of Business Aircraft Sept. 26, 2023: Does your operation have policies for personal use of business aircraft? Flight operation managers and aviation tax experts share their ideas for best practices.
Standard Industry Fare Level (SIFL) Rates for the Second Half of Calendar Year 2023 Aug. 14, 2023: The U.S. Department of Transportation recently released SIFL rates for the six-month period from Jan. 1 to June. 30, 2020. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the First Half of Calendar Year 2023 Feb. 16, 2023: The U.S. Department of Transportation recently released SIFL rates for the six-month period from Jan. 1 to June. 30, 2020. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the Second Half of Calendar Year 2022 Aug. 10, 2022: The U.S. Department of Transportation recently released SIFL rates for the six-month period from July 1 to December 31, 2022. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Latest Tax, Regulatory Changes Detailed in NBAA’s Personal Use of Business Aircraft Handbook July 27, 2022: NBAA has released a comprehensive update to its Personal Use of Business Aircraft Handbook, which provides valuable tax and regulatory compliance strategies when a company makes an aircraft available for non-business use.
Standard Industry Fare Level (SIFL) Rates for the First Half of Calendar Year 2022 Feb. 11, 2022: The U.S. Department of Transportation recently released SIFL rates for the six-month period from Jan 1 to June. 30, 2022. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
IRS Provides Continued Flexibility on SIFL Rates Oct. 21, 2021: The IRS will continue to allow taxpayers to use alternative Standard Industry Fare Level rates for the second half of 2021, from July 1 to Dec. 31, 2021.
Standard Industry Fare Level (SIFL) Rates for the Second Half of Calendar Year 2021 Aug. 23, 2021: The U.S. Department of Transportation recently released SIFL rates for the six-month period from July 1, 2020, to Dec. 31, 2021. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Alternative SIFL Rates Available Thanks to NBAA Advocacy June 21, 2021: NBAA advocacy led to the IRS announcing that alternative Standard Industry Fare Level rates for the first half of 2021 can be used by operators due to the significant COVID-19-related impacts on the standard rates.
Standard Industry Fare Level (SIFL) Rates for the First Half of Calendar Year 2021 March 12, 2021: The U.S. Department of Transportation recently released SIFL rates for the six-month period from Jan 1 to June. 30, 2021. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the Second Half of Calendar Year 2020 Aug. 28, 2020: The U.S. Department of Transportation recently released SIFL rates for the six-month period from July 1 to Dec. 31, 2019. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the First Half of Calendar Year 2020 Feb. 11, 2020: The U.S. Department of Transportation recently released SIFL rates for the six-month period from Jan 1 to June. 30, 2020. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the Second Half of Calendar Year 2019 Aug. 16, 2019: The U.S. Department of Transportation recently released SIFL rates for the six-month period from July 1 to Dec. 31, 2019. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the First Half of Calendar Year 2019 Feb. 28, 2019: The U.S. Department of Transportation recently released SIFL rates for the six-month period from Jan. 1 to June 30, 2019. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the Second Half of Calendar Year 2018 Aug. 21, 2018: The U.S. Department of Transportation recently released SIFL rates for the six-month period from July 1 to Dec. 31, 2018. These rates are necessary when applying the IRS aircraft valuation formula to compute values of non-business transportation aboard employer-provided aircraft.
Standard Industry Fare Level (SIFL) Rates for the First Half of Calendar Year 2018 March 5, 2018: The U.S. Department of Transportation recently revised SIFL rates for the six-month period from Jan. 1, 2018, to June 30, 2018.
Use of Corporate Aircraft by Executives of Public Companies: Should Tax Consequences Be Disclosed? Aug. 30, 2013: SEC rules require disclosure of aggregate incremental for non-business flights by executives
IRS Final Regulations on Deduction Limitations for Personal Entertainment Flights March 11, 2013: The IRS relesed final regulations on entertainment use of business aircraft, the NBAA website provides a link to the final regulations and an article detailing the changes.
American Jobs Creation Act of 2004 Aug. 1, 2012: The IRS released final regulations that disallow deductions for certain personal entertainment flights.
IRS Issues Proposed Regulations on Entertainment Use of Business Aircraft July 30, 2007: On June 14, 2007, the IRS released the proposed regulations relating to deducting expense for the entertainment use of business aircraft. The proposed regulations reflect amendments under the American Jobs Creation Act of 2004
Personal Entertainment Use of Corporate Owned Aircraft Dec. 12, 2005: The American Jobs Creation Act of 2004 (the ‘Act”) will have significant impact on the federal income tax liability of the corporate aviation community. In May 2005 the Internal Revenue Service issued Notice 2005-45 entitled Employer-Provided Aircraft, Limit on Deductibility (“Notice 2005-45”) which provides interim guidance on the administration of the Act as it relates to the personal entertainment use of corporate-owned aircraft.
Use of Business Aircraft: Securities Law Considerations Oct. 17, 2005: It is not uncommon for businesses to make corporate aircraft available to their executive officers and directors for a variety of purposes. Most companies are well aware that use of corporate aircraft for personal purposes raises tax issues for the company and the individual. However, if the company is publicly traded, there are also significant securities law issues to be considered including disclosure obligations, the potential impact of aircraft usage on the independence of outside directors and the risk that aircraft usage might violate the prohibition in Sarbanes-Oxley against loans to officers and directors.
IRS Publishes Guidance for Calculating Disallowance of Expense Deductions for Recreational Use of Corporate Aircraft June 20, 2005: The Act overrides the Sutherland Lumber decision by limiting a taxpayer’s ability to deduct aircraft depreciation and operating expenses when the aircraft is used to provide transportation to certain “Specified Individuals” for entertainment, amusement, or recreational purposes.
Personal Use of the Company Aircraft: IRS vs. FAA vs. SEC June 1, 2005: With public companies falling under the investigative microscope of the Securities and Exchange Commission (“SEC”) and other investor protection groups, and with increased responsibility for CEOs and CFOs for the contents of reports to investors under the Sarbanes-Oxley Act of 2002, executives and directors are looking more closely at the reporting methods of their companies. One of the more common items of investigation and interest is full disclosure (or in some cases lack of disclosure) of top executive compensation including “perks”. “Perks” may include executives’ and directors’ personal use of company aircraft.

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