NATA Commends House Ways and Means Committee Action on Aircraft Management Services Tax Legislation

Washington, DC, July 13, 2016 – Today, the House Ways and Means Committee approved legislation (H.R. 3608) sponsored by Representative Pat Tiberi (R-OH), which clarifies that aircraft management services are not subject to air transportation taxes. The Tiberi legislation responds to a March 2012 IRS Chief Counsel Advice Memorandum that concluded aircraft owners employing aircraft management services and allowing the use of the aircraft 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.

“NATA deeply appreciates Chairman Brady (R-TX) and the members of the Ways and Means Committee for moving forward this common sense legislation. While the IRS backed away from their original position, small aviation businesses are still vulnerable to potentially enormous tax liabilities and ongoing audits,” stated NATA Senior Vice President for Government and External Affairs William R. Deere. “Representative Tiberi is a tireless advocate for aviation businesses and we thank him for advancing this legislation. We urge the House Leadership to schedule this key legislation for early floor action in September.”