The House Ways and Means Committee today approved, by voice vote, an amendment in the nature of a substitute to H.R. 3608—legislation to exempt certain amounts paid by aircraft owners to aircraft management services companies from the excise taxes imposed on transportation of persons and property by air.
Specifically, the exempt payments would be those amounts paid by an aircraft owner for management services related to maintenance and support of the aircraft or flights on the owner’s aircraft. Applicable services include:
Payments for flight services would be exempt only to the extent that they are attributable to flights on an aircraft owner’s own aircraft.
As approved by the Ways and Means Committee, the legislation includes a special rule for aircraft held in an entity wholly owned by an individual (such as an aircraft in an LLC wholly owned by an individual) so that a payment made by the individual to the management company is treated as a payment paid directly by the entity.
The bill will now be referred to the full House of Representatives for possible consideration. A date has not been set for the House to consider the bill. The Senate has not scheduled action on similar legislation.
© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.