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June 25, 2012   null   Volume 11 Issue 26

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Member News

nullCongress Could Consider Highway Bill Conference Agreement This Week
Act Today On Fuel Fraud Tax Repeal By Contacting Key Members Of Congress

NATA is requesting its members to contact Members of Congress serving on the conference committee established to resolve differences between the U.S. House of Representatives and U.S. Senate versions of the Highway Bill TODAY and TOMORROW and urge them to support a repeal of the onerous fuel fraud tax. The conference committee is one of the last steps in the legislative process before an agreement is finalized on the Highway Bill and it is approved by both the House and Senate and then signed into law by the President. 

NATA strongly encourages all member companies to utilize the association’s recent Action Call to reach out to these conference committee members today and encourage them to support a repeal of the onerous fuel fraud tax. To view NATA’s Action Call, please click here.

To view NATA’s comprehensive issues Web page on the fuel fraud tax, please click here.

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nullIndustry-IRS Meeting Discussed Tax Applicability To Management Fees

Last week, members of a joint NATA-NBAA excise tax working group met with Internal Revenue Service (IRS) officials in Washington, DC. During the meeting, industry representatives presented the association’s view that the IRS erred in the conclusions drawn in an IRS Chief Counsel Advice (CCA) memorandum that was released earlier this year.

In support of the position that management fees should not, in general, be subject to commercial federal excise taxes on transportation, the industry working group has presented a detailed analysis and review of existing IRS guidance and case law for the agency to consider. 

The content of the response to the CCA is being provided to members of both organizations to help them better understand the issue and prepare, with the support of consultants and/or counsel, for potential future audits.

Also last week, efforts by NATA and its members to alert Congress to the devastating impact of the CCA’s conclusions on members providing on-demand air charter and aircraft management services resulted in a letter being sent from the chairman of the U.S. House of Representatives Subcommittee on Aviation to the chairman of the House Committee on Ways and Means. In the letter, Congressman Thomas E. Petri (R-WI) articulates concern that, via the CCA, “the IRS may be expanding the scope of operations covered by commercial taxes.”

Petri requests that Committee on Ways and Means Chairman Dave Camp (R-MI) review, “whether it is the intent of Congress that flights on private aircraft that involve aircraft management companies be considered commercial aviation flights for IRS tax purposes.”

The Committee on Ways and Means has oversight authority for the IRS and will be instrumental in any congressional action related to the CCA. NATA has already been in touch with the committee staff to continue to elevate member concerns with the course of action taken by the IRS and will update members on any actions taken by Chairman Camp.

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nullLetter To Tennessee Governor In Opposition Of Government Competition With Private Business

NATA recently sent a letter to Tennessee Governor Bill Haslam expressing the association’s concern with airport sponsors using state grant funding to compete unfairly with private business. NATA asked Governor Haslam to reexamine Tennessee’s current policy of allowing state grant funding to be used to construct facilities designed to compete with existing private businesses.

The letter pointed to the Chattanooga Metropolitan Airport Authority’s (CMAA) use of more than $10 million in government-issued grants to establish its own general aviation service facility to compete directly with the privately owned service provider at Lovell Field Airport (CHA). NATA noted that allowing state grant funding to be used to compete with private business will likely have the effect of chilling private investment at public use airports, placing a further strain on state and local government budgets.

NATA is working with the Business Coalition for Fair Competition (BCFC) to remind state and federal legislators of the importance of the private sector to the economy, jobs and businesses.

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nullNATA Policy Playbook Blog – No RFP And More Taxes

In a post this week to NATA’s Policy Playbook Blog, association Director of Regulatory Affairs Michael France addresses the decision by the Hickory, North Carolina City Council to take over FBO operations at Hickory Regional Airport without providing any opportunity for private business to bid on the operation.

Click here to read this week’s NATA Policy Playbook Blog.

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nullHouse Appropriations Committee Considers Avgas Funding

Last week, the U.S. House of Representatives Committee on Appropriations released its report on the 2013 appropriations bill it will be considering. Page 27 of the report discusses the committee’s recommendation to appropriate $1.9 million for research on alternative unleaded avgas in 2013. The report also notes the FAA’s consideration of the Unleaded Avgas Transition Aviation Rulemaking Committee’s (UAT ARC) recommendations for transitioning the industry to an unleaded avgas: “The Committee looks forward to the FAA’s response, including agency plans to implement the recommendations and devote the resources required to transition in a way that effectively balances environmental improvement with aviation safety, technical challenges, and economic impact.”

The UAT ARC completed and submitted its recommendations to the FAA earlier this year and NATA expects the agency to finish its internal review and make the report public shortly.

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nullPRIA Advisory Circular Updated

An expanded Advisory Circular (AC) that outlines the Pilot Records Information Act of 1996 (PRIA) has been published by the FAA. The updated AC-120-68F now addresses common situations that may affect an employer’s process of obtaining records through PRIA. The AC is supplemented by the PRIA Guidance for FAA Inspectors as well as other various documents found on the PRIA Web site.

The PRIA requires all air carriers operating under Part 121, 135 or 125 to receive and evaluate background information of the previous five years for every pilot applicant. An applicant’s training, experience, qualification and safety background must be thoroughly evaluated before he or she begins service at the company.

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nullFact Sheet Outlines Plan For Improving General Aviation Safety

The FAA General Aviation Safety Fact Sheet details the various means of reducing general aviation accidents. In an effort to reduce the general aviation fatal accident rate by 10 percent from 2009-2018, the fact sheet details methods to improve overall safety by covering such topics as aircraft design and new technology. The FAA emphasizes strong communication with the general aviation community by building its online resources as well as establishing the Airman Testing Standards and Training Aviation Rulemaking Committee (ARC) to reevaluate the standard of testing pilots.

The report states the top 10 leading causes of fatal general aviation accidents from 2001-2011. The top three were:

  • Loss of Control
  • Controlled Flight Into Terrain
  • System Component Failure-Powerplant

While all causes have decreased significantly over the past three years, the overall general aviation fatal accident rate has remained fairly stagnant. The fatal accident rate was 1.3 fatal accidents per 100,000 hours flown compared to 1.10 during the previous year.

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nullWeekly Regulatory Update

Relevant updates from the FAA, U.S. Environmental Protection Agency and the Department of Homeland Security are compiled each day from the Federal Register. The latest notices, rules and proposed rules can now be found in a single source by clicking here.

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nullApplication Of Commercial Taxes To Private Flights
A Three-Part Webinar Series In July

NATA will host a three-part webinar series in July on this topic. The webinars may be purchased separately at $99/each or together as a package for only $249.

All Webinar revenue will be applied to NATA's advocacy and communications efforts is opposition to the expansion of commercial excise taxes to private flights.

About the Issue
Congress created different taxes for commercial and non-commercial aircraft operations. In both cases, taxes collected are for the benefit of the Airport and Airway Trust Fund. The commercial federal excise taxes are imposed on amounts paid by passengers on the airlines and other commercial air carriers. Non-commercial excise taxes are applied on the fuel used in private or general aviation operations. The IRS has generally chosen to ignore how the FAA regulates operations and, instead, makes its own determination (IRS Revenue Ruling 78-75). Despite decades of accepted practice, the IRS is now attempting to expand the scope of operations covered by commercial taxes to those that are clearly private in nature.

At issue is that, after decades of prior audits, guidance (IRS Revenue Ruling 58-215) and enforcement that have consistently deemed operations conducted with the assistance of an aircraft management company to be private and thus subject to the noncommercial taxes, the IRS is now attempting to reverse course and deem all such operations as commercial. 

This course reversal from the IRS is most recently shown in a Chief Counsel Advice (CCA) memorandum issued in early March. Although this communication cannot be used or cited as precedent, this information is already being widely discussed among IRS auditors and is influencing their approach to audits.

The CCA reviews three scenarios wherein the IRS Chief Counsel determines that the fees paid by an aircraft owner to a company for contracted aircraft management services makes the operations commercial and, therefore, those fees are subject to the commercial federal excise taxes. By deeming these situations to be commercial aviation, the IRS position equates flights by a private individual, flying on his or her own aircraft, to and from locations of the owner’s choosing, at times determined by the owner as essentially the same as someone who bought an airline ticket.

If allowed to stand, the likely result of this IRS position is that aircraft owners will be less likely to use management companies, particularly when services are provided by an air charter operator, and will establish total “in-house” flight departments. This will cause owners to miss out on the safety and compliance benefits of working with contracted expertise, while also decreasing the number of aircraft available in the on-demand charter market. This loss of aircraft supply would lead to higher charter costs and some air carriers laying off employees or shutting down entirely due to the loss of available aircraft in the marketplace.

To assist members in fully understanding the impact that this CCA is already having on the aircraft management community, NATA has developed a three-part webinar series with leading subject matter experts. This series will provide a comprehensive overview of the issues in the CAA, how members can prepare for an audit, how aircraft management agreements could be revised and how to achieve balance between IRS FET issues and FAA operational control issues for managed aircraft that are also utilized in Part 135 operations.

All webinars will feature ample time for attendee questions. 

Application of Commercial Taxes to Private Flights
Webinar 1 of 3 - The Audit Process $99.00
The first webinar in our three-part series will give an overview of the process operators can expect during an IRS FET audit. Operators will learn how to prepare and what to expect during the audit. The rights of the taxpayer (i.e. the charter operator) will be covered, including details on the appeals process. Operators will gain confidence in how to prepare if notified of an audit and have an understanding of the timing and process involved.

Webinar Speaker: Nel Stubbs, Conklin & de Decker - Bio

Date: July 11, 2012, at 12:00 EST

Application of Commercial Taxes to Private Flights
Webinar 2 of 3 - Prospective Preparation $99.00
This second webinar in the series will help operators providing management services to understand better if and how they should approach possible revisions to their management agreements in light of on-going audit activity and the issues highlighted in the CCA. 

Webinar Speaker: Keith Swirsky, GKG Law, P.C. - Bio

Date: July 18, 2012, at 12:00 EST

Application of Commercial Taxes to Private Flights
Webinar 3 of 3 - Achieving Balance $99.00
The third webinar in our series will provide a summary of the prior issues and questions discussed and provide operators with an understanding of the need to ensure that proper FAA operational control standards are adhered to while operators at the same time endeavor to position their business best for potential IRS audits.

Webinar Speaker: Kent Jackson, Jackson & Wade, LLC - Bio

Date: July 25, 2012, at 12:00 EST

All Webinar revenue will be applied to NATA's advocacy and communications efforts is opposition to the expansion of commercial excise taxes to private flights.

Click here to register for one or more of these webinars.

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nullThe Most Important Question To Ask A Customer
Don't Miss This Webinar on June 28

During this webinar, we'll discuss ways to determine your SQ (Service Quotient) score. Similar to what an IQ score reveals about a person, an SQ score can reveal a lot about your FBO and how well you are meeting the needs of your customers. We'll discuss ways to benchmark your customer service efforts and reveal to you the secret question you should always ask a customer.

Speakers: Ron Jackson, The Jackson Group
John Enticknap, Aviation Business Strategies Group

Date/Time: June 28, 2012, at 12:00 noon EDT

Click here to register. Registration for this webinar is $49.95 per location and includes a copy of presentation materials and link to a recording of the webinar.

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nullNew Publications – Special Rates And Limited-Time Offers Are Available

NATA announced the release of several new and updated publications since late 2011. The following two publications were made available at the Air Charter Summit this month.

The Charter Consumer Guide is a FREE publication available by download at This publication was designed to help charter consumers answer the following questions and more:

  • When does it make sense to charter?
  • How much does a charter flight cost?
  • What information should I have when calling a charter operator?
  • What information should I ask the charter operator?
  • How do I find a charter operator?
  • So what makes charter smarter?

The Will-Not-Carry Operator Hazardous Materials Training Manual (Special - $75 until July 31, 2012) is a downloadable and easily customizable publication that can be used to satisfy FAA requirements for will-not-carry operators to have a HAZMAT training program. Once purchased and downloaded, the operator simply updates the information in the highlighted fields with company-specific details and follows the straightforward guidance on complying with provisions of the Hazardous Materials Regulations (HMR), Title 49 Code of the Federal Regulations (49 CFR) and Title 14 Code of Federal Regulations (14 CFR). The regulations have changed. If you haven’t updated your manual recently, you should download your copy today.

NATA is offering the next three books separately or together as an FBO Managers Resource Kit. The FBO Managers Resource Kit offers the best discount price for these publications: $600 for members.

The Community Relations Toolkit ($149 for members, if purchased separately from the FBO Managers Resource Kit) was developed to help airports expand community outreach efforts to airport neighbors and key stakeholders. This handbook has been developed to provide a guideline for community relations efforts.

Negotiating Aviation Agreements: A Guidebook for Building and Protecting Your Business ($399 for members, if purchased separately from the FBO Managers Resource Kit) is a resource for fixed base operators and specialized aviation service operations doing business at general aviation airports. Sample provisions and practical tips are included in this guidebook.

Refueling and Quality Control Procedures for Airport Service and Support Operations($195 for members, if purchased separately from the FBO Managers Resource Kit) provides airport fuel service providers a comprehensive review of the many complex standards and requirements for the handling of aviation fuel in a way that is easy to understand. The incorporation of full-color photographs adds to the usefulness of the 2011 revision as a teaching tool for new and seasoned fuel handling technicians alike.

The aforementioned publications and additional products are available at the NATA Store at

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nullPurchase Popular 2012 Compensation Report Today

NATA has published the results of its 2012 survey of general aviation service employee compensation. The 2012 Compensation Report includes salaries and benefits for pilots, line-service personnel and maintenance technicians.

Employee compensation is broken down by geographic region of the country, by the company's gross sales, by size of the town or city in which the company is located and by the number of employees in the company. In addition to pilots and maintenance technicians, the report includes compensation for inspectors and line service and customer service representatives, among others.

Association Research Inc., a leading economic research firm based in Rockville, Maryland, conducted the salary study. For privacy reasons, none of the individual responses are provided to NATA.

The 2012 Compensation Report is provided at no cost to NATA members who participated in the study. For non-participating members, the charge is $130. The non-NATA member cost is $310.

A copy of the 2012 Compensation Report may be purchased on the NATA Web site under Products and Services by clicking on Publications.

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nullNATA RFPs, Classifieds And Job Board

Were you aware that NATA members can post jobs, RFPs and classifieds to the NATA Web site? This section of the NATA Web site is available exclusively for members and can be found by clicking here. Members can also use this area to upload jobs and RFPs by filling out a simple form and clicking “submit.”

You may also submit your post by emailing it to

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NATA E-Learn Webinars

Click here to view a listing of archived webinar recordings.




NATA is the National Air Transportation Association

Founded in 1940, NATA aggressively promotes safety and the success of aviation service businesses through its advocacy efforts before government, the media and the public as well as by providing valuable programs and forums to further its members' prosperity.

National Air Transportation Association
4226 King Street
Alexandria, VA 22302
Phone: 800-808-6282
Fax: 703-845-8176




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