In response to the coronavirus pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act. While the $2 trillion relief package addressing the COVID-19 threat is an expansive piece legislation to help the U.S., it has several provisions that specifically pertain to private jet travel. Here’s what you need to know about the CARES Act and what it means for private aviation.
CARES Act: What It Means For Private Jets
Federal Excise Tax Suspension for Private Jets
The newly signed CARES Act provides relief to businesses and private jet travelers for the remainder of 2020. In particular, the legislation suspends the 7.5% federal excise tax (FET) on air transportation.
Effective March 27, 2020, the new measure will be in place through Jan. 1, 2021. That means, when business gets back to normal, you’ll enjoy these cost deductions on your private flights throughout the rest of the year.
In addition to the FET suspension, domestic and international segment fees will be suspended, as well as the 6.25% tax on the transportation of property. The coronavirus relief package will provide savings on fuel too, with the suspension of the 4.3 cents per gallon excise tax on kerosene for commercial aviation use. However, the CARES Act suspensions won’t apply to the Leaking Underground Storage Tank Trust Fund tax.
What is the CARES Act? Additional Details
Aside from the FET suspensions, the CARES Act has several other key provisions. Overall, these will impact businesses, as well as the aviation industry at large.
The package includes $10 billion for U.S. airports that are eligible for relief from the U.S. Treasury’s General Fund. According to NBAA, these funds will be made “available as quickly as possible and the FAA plans to begin distributing them in April.” Around $100 million in these funds are reserved specifically for general aviation airports.
As part of the $500 billion Economic Stabilization Fund, the Treasury Department will offer loans and other investments. As a result, businesses facing serious losses because of COVID-19 are eligible. But for the commercial airline industry, this means grant programs for air cargo and passenger air carriers that will cover employee salaries.
The CARES Act addresses many things outside of aviation as well. According to NPR, this includes $560 billion for individuals, $337 billion for small businesses, around $340 billion for state and local governments, plus over $150 billion for public health.
How To Save On Your Next Trip with Magellan Jets
As more businesses and people turn to private jets as safer alternatives to commercial travel amid the coronavirus pandemic, Magellan Jets is here for you. Specifically, we’ve enhanced our health protocols and have an internal, expert task force to keep you safe during these times of uncertainty. Take advantage of CARES Act savings this year by booking your next private jet flight with Magellan Jets.
Get a quote now or call Magellan Jets today at 877-550-5387.