NATA News

On March 9, the Internal Revenue Service (IRS) issued a memorandum stating that monthly fees paid to a management company by an aircraft owner are taxable. In its memo, the IRS reviewed three scenarios where agency believes management fees should be assessed transportation taxes. According to the IRS, “If we determine that the management provides taxable transportation to the owner, we must then determine whether the monthly management fee is an ‘amount paid’ for that taxable transportation.”

NATA issued the following statement last week in response to this latest IRS memo:
“NATA is deeply concerned, but not surprised, by the recent IRS document related to the applicability of commercial federal excises taxes on fees charged for aircraft management. For the last few years, the IRS has increasingly sought to impose the tax on management fees. Fortunately, most operators have been successful in defending against what the association believes to be an incorrect application of the tax. This internal communication heightens concern that the IRS is intent on trying to collect taxes on aircraft management situations that have historically been viewed, by both the FAA and the IRS, as noncommercial. NATA is working aggressively with tax experts to analyze the IRS document and provide further guidance to the membership.”
The NATA Air Charter Committee will meet on March 30 in Washington, D.C. to discuss the next steps, including the formation of a coalition of interested parties to counter this latest IRS memo.
A copy of the IRS memo can be read in its entirety by clicking here.

Members with questions on this issue should contact Eric Byer or Jacque Rosser on the NATA staff.

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The U.S. Senate passed legislation, S. 1813, to reauthorize federal aid highway and highway safety construction programs on a bipartisan vote of 74-22. The $109 billion surface transportation plan was passed 16 days before the March 31 expiration of the current law. 

The provision to repeal fuel fraud was not included in the Senate bill; however, the Senate Committee on Finance has agreed to work toward inclusion of the provision during conference negotiations. In addition, an amendment offered by Senators Lamar Alexander (R-TN) and Ron Wyden (D-OR), on which NATA issued an action call, passed the Senate. The provision would significantly affect air tour operators conducting commercial air tours over national parks by giving the National Park Service (NPS) sole authority to authorize, limit or eliminate air tours. Today, the NPS and the Federal Aviation Administration (FAA) are equal partners in the process for establishing air tour management plans over national parks. The amendment makes the FAA subordinate to the NPS, upsetting the intentional balance between the interests of the environmental community and the air tour operators.

Meanwhile, the U.S. House of Representatives is still working to reach a compromise on how to proceed with their version of the highway reauthorization bill.

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NATA, along with nine other aviation organizations, sent a letter to members of the U.S. House of Representatives and U.S. Senate Committees on Appropriations seeking support for the FAA’s Contract Tower Program. The President’s fiscal year 2013 budget request decreased the FAA Contract Tower Program by six percent, raising concern within the aviation industry over the potential for towers to be closed or operating hours to be reduced. The industry requested that $136.1 million be authorized for the regular FAA Contract Tower Program, as well as an additional $10.35 million for the continuation of the contract tower cost-sharing program. Full funding of the program will permit continuation of this important safety program and allow additional non-towered airports to receive the vital safety benefits of a control tower.

The FAA Contract Tower Program has provided cost-effective and essential air traffic safety services since 1982. Currently, 249 smaller airports in 46 states participate in the program. Together, these 249 towers handle approximately 28 percent of all air traffic control tower (ATCT) aircraft operations in the U.S. but account for just 14 percent of FAA’s overall budget allotted to total ATCT tower operations. Most importantly, the safety and efficiency record of the FAA Contract Tower Program has been validated numerous times by the Department of Transportation Inspector General and FAA safety audits, as well as by the National Transportation Safety Board.

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A coalition of general aviation organizations, including NATA, sent a letter to U.S. House of Representatives Committee on Appropriations Chairman Harold Rogers (R-KY) requesting $1.995 million to continue research on alternatives to leaded aviation gasoline. The funding request is to continue the complex transition to an alternative unleaded fuel for piston-engine aircraft. A similar letter was sent to Transportation Appropriations Subcommittee Chairman Tom Latham (R-IA) and the other members of the subcommittee.

The Unleaded Avgas Transition Aviation Rulemaking Committee was commissioned by the FAA to work through the current issues relating to the transition to an unleaded avgas. The funding request is based on the committee’s recommendation. While the committee has completed its work, the FAA is reviewing the report and recommendations and, therefore, the report has not yet been made public. 

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NATA has produced two publications that will assist its members in navigating two areas of upmost importance in general aviation. These publications were created with the help of general aviation industry experts.

To purchase NATA's publications, please click here. If you have questions, please contact Jess Hammett at jhammett@nata.aero or 703-845-9000.

NATA Negotiating Aviation Agreements: A Guidebook for Building And Protecting Your Business
The purpose of this guidebook is to serve as a resource for fixed base operators and specialized aviation service operations doing business at general aviation airports. It is not intended to provide legal or business advice but, instead, to identify and discuss certain legal, business, and insurance issues that arise in negotiating agreements to provide aeronautical services at airports.

NATA Community Relations Toolkit
NATA recognizes the need for airports to expand community outreach efforts to airport neighbors and key stakeholders. This handbook has been developed to provide a guideline for community relations efforts.

Pricing

On March 9, 2012, Idaho Governor C.L. Otter signed into law a bill that exempts aircraft parts, supplies and maintenance from the state’s sales and use taxes. The legislation passed in the Senate on February 28, 2012, and was given to the governor for approval on March 5, 2012.

Passage of Idaho House Bill 417 provides more jobs at the state’s 26 maintenance and repair stations, as well as increases competitiveness among the facilities with those of surrounding states that do not have the tax. Over the next five years, it is estimated that more than 100 new jobs will be created through the legislation due to more work being performed in Idaho.

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On March 8, 2012, Indiana Governor Mitch Daniels signed a proclamation declaring March 2012 “General Aviation Appreciation Month” across the state. General aviation supports more than 18,000 jobs throughout Indiana, according to the state’s Department of Transportation. NATA’s thirty-five members help contribute to the $4.9 billion in economic activity that the industry produces in the state.

Industry organizations applauded the governor’s efforts in recognizing the importance of general aviation in Indiana and across the country. NATA President and CEO James K. Coyne thanked the governor for highlighting the significance of the industry to the communities of Indiana. “General aviation and community airports are a vital asset to the overall transportation infrastructure of Indiana and the country, especially in places with limited access to commercial airports.”

To view the Alliance for Aviation Across America’s press release, click here.

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Register at www.nata.aero/events
More than 150 industry leaders will come together for NATA's A Capital Week for Aviation Business in Washington to take part in a variety of events, including the FBO Leadership Conference (March 28-29) and new FBO Managers Workshop: Influencing Your Airport Commission (March 27-28). All events will be held at the Hyatt Regency Washington on Capitol Hill. Whether you register for one event, stay for all or send a team to divide and conquer, you will not want to miss this most important week to express the vital significance of aviation businesses to the community and to the nation’s economy, and to gather the latest intelligence regarding the current state and future prospects of the industry. 

Special pricing is available to those registering to attend both the FBO Leadership Conference and the FBO Managers Workshop. The schedule below highlights all NATA’s A Capital Week for Aviation Business events. Click here for more information on NATA’s A Capital Week for Aviation Business events, housing details and registration instructions, or call (800) 808-6282 to register by phone.

Contact NATA Director of Meetings and Conferences Diane Gleason at dgleason@nata.aero or (703) 575-2050 for hotel reservations and to find out how you can reach your target audience through NATA Sponsorship Opportunities. We look forward to seeing you.

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A recording of NATA’s popular overview webinar of federal excise taxes (FET) is now available for purchase. This webinar will provide employees responsible for managing FET assessment, collection or remission for air charter operations the knowledge to accomplish those tasks successfully. Some of the questions answered during this one-hour webinar:

• Have you ever been confused about why some flights to Canada are taxed as domestic and others are international?
• Are you unsure whether to apply FET to landing fees or overnight expenses for the crew?
• Do you know if hospitals, universities and other non-profits are exempt from FET?
• Are you sure you are claiming the proper fuel credit?
• Do you know why sometimes you should receive a 20-cent-per-gallon credit and other times it is 17.5 cents?

If you're looking for the answers to these questions and others, you need to purchase the recording of this webinar.

Among the topics covered:

• Commercial and Noncommercial FET rates
• Items subject to and exempt from FET
• Operations exempt from FET
• Fuel credits
• IRS Forms and Publications

Speaker: Jacqueline Rosser, Director of Regulatory Affairs

Click here to purhase the recording. Purchase price for this webinar is $49.95 per location and includes a copy of presentation materials. Click here for a list of upcoming webinars and a link to purchase other archived recordings.

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NATA's Line Service Supervisor Training Seminar will once again take place at the New England Air Museum in Windsor Locks, Connecticut, on May 15-16. This seminar, specifically designed for Line Service Supervisors, provides the training you need to become more proficient in strategic planning, supervising staff, motivating others, communicating and coaching a team. This high-impact, high-energy seminar includes guided group debates, role playing, interactive games and various case studies designed to take you to a new level of leadership. You will also take part in self-assessments to explore your strengths and weaknesses and their effect on your management style.

Don't miss the chance to attend the LSST in Windsor Locks. Click here for more details and a link to register for the LSST Seminar.

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NATA E-Learn Webinars

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.