Wall Street Journal opinion piece authored by Flytenow’s attorneys (November 16, 2016 “Ride-Sharing for Pilots is No Flight of Fancy”), suggests the Federal Aviation Administration is banning pilots from using the Internet to take advantage of the share economy. In NATA’s response also published by the
Wall Street Journal, Marty Hiller stated, “This is part of a campaign to convince people it is now acceptable to allow the public to ride-share with private pilots with potentially little flight time or training for challenging weather conditions. As the U.S. Court of Appeals noted in one of several legal rebukes issued to the authors’ clients, “Pilots communicating to defined and limited groups remain free to invite passengers for common-purpose expense-sharing flights . . . so long as they share a common purpose and do not hold themselves out as offering services to the public.” The website was shut down in December of 2015 after the U.S. Court of Appeals for the District of Columbia denied FlyteNow’s request to overturn the FAA’s ban on online flight-sharing websites.
Congress is now in full swing and is considering policy issues impacting aviation businesses. NATA has updated its whitepaper, "Major Policy Issues," to include the FAA reauthorization and tax issues.
Registration is now open for the first Advanced Line Service workshop for 2017. The ALS workshop will be held on January 18 & 19 at Galaxy FBO in Houston, TX. The registration fee is only $225/person for this 2-day event and there’s limited seating so don’t hesitate! Click here
Congress adjourned on September 28th and will return after the November 8th general elections for a post-election, lame duck, session.
In July, the House and Senate approved and sent to President Obama an extension of the FAA’s funding and aviation taxes at current levels through September 30, 2017.
The legislation is more than a simple extension and includes provisions related to unmanned aerial vehicles, airport security, and streamlining the third-class medical process. Significantly, the legislation
does not include a House proposal to corporatize air traffic control. NATA members should be rightly proud of their role in preventing the inclusion of this House provision that negatively impacts our Part 135 members and general aviation as a whole.
Though the battle is won, the debate continues. Last month, the airlines (except Delta) announced their intention to reengage in the corporatization debate. The airlines are also reloading, lately adding to their already formidable stable of consultants two senior staffers who recently departed from the House Transportation Committee.
Taxation of Aircraft Management Services
NATA works with both the executive and legislative branches towards clarifying that FET should not be applied to aircraft management services. On the executive branch side there has been progress but also a great deal of staff turnover at Treasury and IRS. While that is not unusual at the end of a President’s second term, it makes discussions more challenging.
On the legislative side, we are pleased with the progress so far this session of Congress. The House Committee on Ways and Means on July 13th approved bipartisan legislation (H.R. 3608) sponsored by Representative Pat Tiberi (R-OH), which clarifies that aircraft management services are not subject to air transportation taxes. Senators Sherrod Brown (D-OH) and Rob Portman (R-OH) previously introduced companion legislation (S.2092) in that Chamber.
The Committee’s action marks another milestone in NATA’s efforts to reverse a March 2012 IRS Chief Counsel Advice Memorandum that concluded aircraft owners employing aircraft management services and allowing its use for occasional charter operations should apply the 7.5 percent Federal Excise Tax (FET) on amounts paid for those management services. In May 2013, the IRS suspended assessments of the tax pending further clarifying regulations. While we continue to work with Treasury and the IRS, legislation clarifying the issue would be the most effective means of addressing the issue.
In 2015, NATA and others reintroduced legislation to clarify that aircraft management services are not subject to air transportation taxes. This included input from the powerful Joint Committee on Taxation. Earlier this year, the Joint Committee informed the tax-writing committees that the legislation’s impact on future federal revenues is insignificant, an important step in the progress of any tax-related legislation. Though approved by a voice vote, consideration of the legislation did spark some controversy (time stamp 43:22).
NATA is not yet writing off a congressional solution in 2016. In the upcoming lame-duck session, the association will be looking for opportunities to add the bill to any session ending tax legislation.
Before adjourning in September, Congress voted to extend funding for the FAA (and all other federal agencies) at current levels until December 9th. It will return post-election to complete work on FAA funding for the balance of the 2017 fiscal year.
NATA launched a grassroots campaign in response to the House Transportation Committee’s FAA reauthorization proposal to establish a user fee-funded air traffic control corporation. The legislation — which poses a significant threat to the entire general aviation community — was approved by the House Transportation and Infrastructure Committee on February 11th.
NATA created a special webpage — www.nata.aero/nocorporation — providing additional information and easy steps general aviation businesses can take to contact their elected representatives in opposition to this proposal.
“The hour has rarely been graver for general aviation and we are calling on all aviation businesses to join us. Your immediate personal outreach to your elected representatives is critical to staving off the corporatization of ATC and the imposition of user fees on segments of general aviation. We want make it clear that industry insiders don’t get to decide the future of our nation’s air traffic control system.”