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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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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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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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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