IRS Memo Points to Effort To Tax Aircraft Management | Aviation International News

Charter & Fractional

IRS Memo Points to Effort To Tax Aircraft Management

By Matt Thurber • Editor-in-Chief

March 20, 2012

The U.S. Internal Revenue Service Office of Chief Counsel issued a memo on March 9 that justifies applying the 7.5-percent federal excise tax to aircraft management fees paid by Part 91 operator customers. The memo responds to a key question: “Are the monthly management fees paid to the aircraft management company…‘amounts paid for taxable air transportation of persons,’ and thus taxable?” It concludes that taxable air transportation of persons is occurring and thus “the monthly management fees, as well as the separately reimbursed amounts, paid to management…are taxable.”

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