CARES Act 7.5% FET Benefits for Private Jet Flights
2020 CARES Act Tax Holiday Private Jet Travel Benefits
INVEST IN A TRAVEL SOLUTION NOW AND HELP GROW YOUR BUSINESS, BOOST THE ECONOMY, CREATE JOBS AND CONNECT COMMUNITIES
What is the CARES Act tax holiday?
With companies across the country eager to get back to business again, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides an added benefit to organizations that utilize the safety of private aviation. As part of the CARES Act, a tax holiday is in place through December 31, 2020, which suspends certain excise taxes on business aviation.
How does the tax holiday work?
As a stimulus to boost the American economy, the U.S. government will not impose the 7.5% federal excise tax (FET) on all private travel purchased before Dec. 31, 2020. For a limited time, companies and individuals that purchase jet time before the end of the year can fly at any time in 2020, 2021 and beyond, with the entire purchase also exempt from the normal 7.5% federal excise tax. The excise tax holiday applies to taxes normally imposed on amounts paid for the transportation of persons and property by air under I.R.C. §§ 4261 and 4271 between March 28, 2020, and Dec. 31, 2020.
Overall, air transportation excise taxes affected by the holiday include:
- – The 7.5% tax on amounts paid for transportation of persons by air.
- – The domestic segment tax.
- – The international travel facilities tax.
- – Amounts paid for the right to award free or reduced rate air transportation (mileage awards).
- – The 6.25% tax on amounts paid for transportation of property by air.
- Source: IRS
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MAGELLAN JETS DIFFERENCE:
Magellan Jets extends even more benefits to guests during this tax holiday by offering longer contract terms on all hours purchased now through the end of year. Whether it’s exploring a jet card or becoming a member, act now to enjoy a risk-free way to invest in your future travel. Our Private Aviation Consultants are available now to help you and your organization get back to business, efficiently and safely.
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*As stipulated per CARES Act (Section 4007), from March 28 through Dec. 31 of 2020, Federal Excise Tax (FET) will be waived at the time of purchase. For travel taking place after Dec. 31, 2020, no tax will be imposed on the purchase of the travel as long as the purchase occurs during the excise tax holiday. CARES Act savings subject to change pending any new legislation.
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