NATA Statement in Support of Introduction of Bipartisan Tax Legislation Clarifying Treatment of Aircraft Management Services

Washington, DC, February 7, 2017 – Yesterday, Representative Pat Tiberi (R-OH) reintroduced bipartisan, bicameral legislation (H.R. 896) clarifying that aircraft management services are not subject to air transportation taxes. Senator Sherrod Brown (D-OH) is expected to introduce the Senate companion bill today. Similar legislation was approved by the House Committee on Ways and Means last July. The lawmakers’ initiative is in response to a March 2012 IRS Chief Counsel opinion that concluded aircraft owners utilizing aircraft management services who also allow the use of the plane for occasional charter operations should have the 7.5 percent commercial ticket tax assessed on amounts paid for those management services. In May of 2013 the IRS put the opinion on hold pending further clarifying regulations.  

The following is a statement by National Air Transportation Association President Martin H. Hiller: 

"NATA deeply appreciates the work of Representative Tiberi and Senator Brown to advance legislation that is so important to numerous small aviation businesses vulnerable to potentially enormous IRS assessments. These leaders understand the position the IRS took in 2012 represents double-taxation on aircraft owners who may seek to defray the costs associated with ownership through the chartering of the aircraft when it is not in use. The Joint Committee on Taxation has previously reviewed the Tiberi/Brown bills and determined addressing the IRS’s misapplication of the ticket tax costs the taxpayer nothing while removing considerable uncertainty for small businesses and aircraft owners alike. We urge the Ways and Means and Finance Committees to include these bills in the comprehensive tax legislation currently under development in Congress.”