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 addressed the COVID-19 threat is an expansive piece legislation to help the U.S., it had several provisions that specifically pertain to private jet travel. Here’s what you need to know about the CARES Act and what it meant for private aviation.
CARES Act: What It Means For Private Jets
Federal Excise Tax Suspension for Private Jets
Effective as of March 27, 2020, the new measures were in place through Dec. 31, 2020. As business returned to normal, guests enjoyed these cost deductions on their private flights throughout the year. Additionally, travelers received these savings on all charter flights booked in 2020. Meanwhile, guests who purchased jet card hours in 2020 also saved on the 7.5% FET during the tax holiday.
With companies across the country eager to get back to business again, the CARES Act provided an added benefit to organizations that utilize the safety of private aviation. For a limited time, companies and individuals that purchased jet time before the end of the 2020 can fly at any time in 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 were suspended, as well as the 6.25% tax on the transportation of property. The tax holiday provided savings on fuel too, with the suspension of the 4.3 cents per gallon excise tax on kerosene for commercial aviation use.
WHAT IS THE CARES ACT? ADDITIONAL DETAILS
Aside from the FET suspensions, the CARES Act had several other key provisions. Overall, these impacted businesses, as well as the aviation industry at large.
The package included $10 billion for U.S. airports that are eligible for relief from the U.S. Treasury’s General Fund. According to NBAA, these funds were made “available as quickly as possible and the FAA plans to begin distributing them in April.” Around $100 million in these funds were reserved specifically for general aviation airports.
As part of the $500 billion Economic Stabilization Fund, the Treasury Department offered loans and other investments. As a result, businesses facing serious losses because of COVID-19 were eligible. But for the commercial airline industry, this meant grant programs for air cargo and passenger air carriers that covered employee salaries.
The CARES Act addressed many things outside of aviation as well. According to NPR, this included $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 Plan 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. Book your next private jet flight with Magellan Jets today.