Senate Wants Even Tighter Corporate Aircraft Tax Rules

There will be no free rides for anyone on company aircraft if the Senate’s version of the Surface Transportation Reauthorization Act is passed. According to an analysis by the National Business Aviation Association, the Senate has imposed even tighter limitations on the write-offs companies can claim when their aircraft are used for “entertainment” purposes. The Senate bill proposes to amend the American Jobs Creation Act, passed last fall. Under the Jobs Act, companies were limited in their ability to deduct aircraft operating expenses for flights provided to “specified individuals” (e.g., executives) to the value imputed into the recipient’s income. The Senate amendment expands the provision to all employees. The Senate bill also proposes changes to the way taxes are collected on jet fuel. According to the NBAA, the IRS believes a lot of jet fuel ends up in cars and trucks instead of airplanes and it wants to stem that tide. If the bill passes, FBOs at airports not served by a fuel pipeline will buy the fuel with tax included at the rate of 24.4 cents per gallon and will then claim a refund of 2.6 cents a gallon after selling it as aircraft fuel. Neither provision was in the House version of the bill and a conference will be held between the two to resolve the differences between them.