Revised and Improved Edition of NBAA Federal Excise Taxes Guide Now Available

NBAA has compiled the latest information from the IRS and other resources on how FET applies to commercial air transportation of passengers, including the percentage tax on domestic travel and related exceptions and exclusions.


Washington, DC, Oct. 11, 2013 – The National Business Aviation Association (NBAA) has released its new Federal Excise Taxes Guide: Details on Air Transportation and Fuel Taxes. Last published in 2005 as the NBAA Federal Excise Tax Handbook, the guide is intended to provide business aircraft owners, flight departments and charter operators with a basic understanding of the federal excise taxes (FET) that apply to business aircraft activity.

In assembling the guide, NBAA compiled the latest information from the Internal Revenue Service (IRS) and other resources on how FET applies to commercial air transportation of passengers, including the percentage tax on domestic travel and related exceptions and exclusions, domestic segment fees, and the head tax on international transportation.

The guide also outlines FET applicability on the air transportation of property or cargo-only operations. Key concepts such as possession, command and control; available FET exemptions; and charter broker obligations for air transportation excise taxes are explained in plain language.

Several topics have changed significantly since the last edition of the publication, including the application of FET on fractional aircraft ownership program operations, IRS legal interpretations regarding aircraft service and pilot service agreements, and reimbursement under the so-called “Schwab re-interpretation.” These changes are detailed in the revised Federal Excise Taxes Guide.

The Federal Excise Taxes Guide is a comprehensive but concise reference that provides NBAA Members with summary information about the applicability of excise taxes to common business aircraft operations and scenarios. The guide is available exclusively to NBAA Members and is an important tool for flight department managers, accounting staff responsible for invoicing and tax remittance, and aircraft owners.

“NBAA is pleased to provide this significantly improved guide to our Members, and the Association is grateful to the volunteers on NBAA’s Tax Committee, who developed and reviewed this publication,” said Scott O’Brien, NBAA’s senior manager of finance & policy. “Both FAR Part 91 and 135 operators deal with federal excise tax issues on a daily basis, making this guide a key resource for Member Companies.”

All NBAA Members are eligible to download the publication in PDF format from the NBAA website. For more information on the Federal Excise Taxes Guide or to obtain a copy, visit www.nbaa.org/fet or contact NBAA’s Operations Service Group at (202) 783-9250 or ops@nbaa.org.

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