November 24, 2020

NATA, NBAA Present to Treasury on Federal Excise Tax Exception for Aircraft Management Services

Holland & Knight Alert
John B. Hoover

The National Business Aviation Association (NBAA) joined with the National Air Transportation Association (NATA) to present comments on Nov. 19, 2020, to the U.S. Department of the Treasury regarding the Federal Excise Tax (FET) exception for aircraft management services under § 4261(e)(5). The presentation was by telephone conference rather than an in-person hearing due to the COVID-19 pandemic.

Holland & Knight Partner and NBAA Tax Committee Chair John Hoover was the primary presenter for the NBAA Tax Committee. During the call, Mr. Hoover reasserted the request that persons related to the aircraft owner ought to be eligible for the exception, in view of the fact that agents and constructive lessees of the aircraft owner should be eligible for the exception. During the call, guidance was also requested regarding owner trusts, the anti-abuse rule for disqualified leases, the anti-abuse rule for fractional programs, the definition of private aviation, charter flights for aircraft owners, substitute aircraft and other issues.

The call followed the NBAA and NATA submission on Sept. 29, 2020, of detailed comments on a notice of proposed rulemaking (NPRM) regarding the industry-championed legislative exemption from FET on aircraft management services paid for by aircraft owners.

Please view the summary of the comments from the call at your convenience and share with others who may benefit.

For more information, contact Mr. Hoover.

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