Clarifying FET Applicability to Aircraft Management Services

Companies and individuals often grapple with the tax complexities involved with operating a business aircraft, with federal excise tax (FET) obligations a common area of uncertainty. Tax experts encourage operators to conduct an FET analysis any time money is moved to pay for aircraft operations.

The final rule affirms that owner trust arrangements, used to register thousands of business aircraft for regulatory compliance purposes, are covered by the FET exemption.

NBAA and NATA asked the IRS to continue the reform of federal excise tax regulations by addressing unclear and confusing rules covering the collection responsibilities for air charter operators and brokers.

A recently issued IRS final rule clarifies the applicability of federal excise taxes to management companies and aircraft owners and prevents the improper and retroactive application of FET charges.