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You are here: Home / Archives for fet

What is FET?

 

Transcript:

FET is Federal excise tax, and it’s another tax to be mindful of when you’re owning or operating a business aircraft. Federal excise tax applies to the purchase or sale of air transportation services. It’s very commonly charged if you buy a commercial air ticket, or if you’re chartering an aircraft or selling charter services on your aircraft, FET would almost always apply. FET however can also apply to certain part 91 operations of an aircraft if aircraft transportation services are being sold.

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How do you calculate Federal excise tax on air transportation?

 

Transcript:

When federal excise tax applies, it is charged at 7 and a half percent of the amount that needed to be paid in order to receive the air transportation, but only for the portions of the flight that occur over the United states, or certain smaller areas surrounding the United States. There is also a $4 pay passenger fee per domestic segment, and for international trips there is a head tax of about $18 for each person arriving or leaving the United States.

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How does excise tax apply to 91.501 operations?

 

Transcript:

The FAA does not consider part 91.501 flights to be commercial aviation, but the IRS disagrees. Excise tax applies to any amount that had to be paid to receive the air transportation. When payment is just in the form of cash, such as with the time sharing arrangement, the taxable amount is simply the amount paid. Hour trading interchange agreements are more complicated because the market value of the barter traded flight hours is taxable in addition to any cash true up paid.

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Does FET ever apply to Part 91 flights?

 

Transcript:

FET as we call it in the industry or commonly fully referred to as federal excise tax, can in fact apply to part ninety-one operations. This is a bit of a hot topic between the IRS and aircraft operators, because federal excise tax is supposed to be a tax on air transportation services, and generally is understood to be a tax on a provider of air transportation services. That said,

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Latest Article

Corporate Jet Investor Town Hall – Finance, Tax and All That Jazz (Webinar Replay)

View a replay of the town hall by clicking the video above, or following the link here.

As you know, these are unprecedented times for business aviation. We invite you to join the Corporate Jet Investor Town Hall as a way of staying connected and informed during this period.

Moderated by Alasdair Whyte, co-founder Corporate Jet Investor, each week CJI will tackle a different issue or topic through the knowledge of as many expert participants as possible.

 » Read more about: Corporate Jet Investor Town Hall – Finance, Tax and All That Jazz (Webinar Replay)  »

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Advocate Consulting Legal Group, PLLC. 3555 Kraft Rd. Suite 240 Naples, FL 34105 and 1300 N. Westshore Blvd. Suite 220 Tampa, FL 33607. Suzanne Meiners-Levy, Esq. (239) 213-0066. Tax Disclosure. We inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under federal tax laws, specifically including the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Privacy Policy. Terms of Use.