NetJets, IRS May Settle Tax Dispute

There have been two key developments in recent efforts by the U.S. government to extract more tax money from fractional-share operators, the subject of a NetJets lawsuit against the government and the government’s counter-lawsuit.

In the recently passed FAA reauthorization funding bill, Congress offers relief for fractional-share providers. The bill requires fractional operators to pay an extra 14.1 cents per gallon surtax on top of existing general aviation fuel taxes. Thus these operations won’t have to pay federal excise taxes because the bill specifically identifies fractional flights as non-commercial.

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