Trump, Republican tax reform plan gives break to private jet, planes




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Donald
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  • The Senate GOP tax bill contains a tax change for
    owners of private jets.
  • People and companies that own jets would have
    payments relating to them exempted from an excise tax.

The Republican tax plan contains several small carve-outs for
specific industries — from
craft-beer tax breaks to changes on
how people can sell stocks.

One of those exemptions in the Senate version of the bill,

the Tax Cuts and Jobs Act, would give a break to owners and
operators of private jets.

Currently, the federal government imposes an excise tax on every
flight an aircraft makes. Under the Republican tax legislation,
costs for maintenance and other support activities
for privately-operated planes would be exempt from the
excise tax. Here’s what that exempts, per the Joint Committee on
Taxation’s description of the provision:

“Applicable services include support activities related to the
aircraft itself, such as its storage, maintenance, and fueling,
and those related to its operation, such as the hiring and
training of pilots and crew, as well as administrative services
such as scheduling, flight planning, weather forecasting,
obtaining insurance, and establishing and complying with safety
standards.”

According to a 2016 letter from the JCT, the exemption
would lose less than $500,000 in revenue over 10 years.

The change appears to be similar to
a bill offered by Democratic Sen. Sherrod Brown of Ohio and
cosponsored by GOP Sen. Rob Portman of Ohio. A separate
bipartisan bill
amending the same part of the tax code was also offered in
the House.

According to the lawmakers, the excise tax was designed to be
imposed on commercial flights rather than “general aviation”
flights, like chartered and private planes, but the IRS has been
imposing the tax on private-aircraft management firms. This has
been
a sore spot for chartered-flight management companies for
some time.

The bills, and thus the provision, are designed to clarify the
types of flights the excise tax will apply to.