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 Dec. 31, 2020. That means, as business gets back to normal, you’ll enjoy these cost deductions on your private flights throughout the rest of the year. Additionally, travelers will receive these savings on all charter flights that are booked in 2020. Meanwhile, guests who purchase jet card hours this year will also save on the 7.5% FET during this tax holiday.
With companies across the country eager to get back to business again, the CARES Act provides an added benefit to organizations that utilize the safety of private aviation. 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.
Beyond the FET suspension, domestic and international segment fees will be suspended, as well as the 6.25% tax on the transportation of property. The tax holiday will provide savings on fuel too, with the suspension of the 4.3 cents per gallon excise tax on kerosene for commercial aviation use.
Magellan Jets extends additional benefits to guests during this tax holiday with longer contract terms on all hours purchased before the end of year. Explore a risk-free way to invest in your future travel and get your organization back to business, efficiently and safely.
Sample 250-Hour JET CARDS FET Exempt Savings
Sample 100-Hour JET CARDS FET Exempt Savings
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.