If you are involved in the air transportation industry in any way, you may be aware of the federal excise tax on air transportation. This 7.5% tax is applied to any and all expenses related to the transport of people or products by air. This includes fuel, tickets, security, facilities, customs, and many more aspects of air transportation.
You may be wondering, how does the federal excise tax on air transportation affect me? Here’s how it may apply to you depending on your level of involvement in air travel and whether or not you may need an aviation lawyer.
If you own a commercial airline, the excise task is applied to nearly every transaction that takes place in the day-to-day operations. Tax laws can be complex. It helps to have an aviation lawyer to help you interpret the law and ensure your airline is in compliance with tax laws. Violating tax laws is not only a federal offense, but it can cause your business great financial stress if discovered.
Owners of private aircraft are also susceptible to aviation taxes. Whether you use your aircraft for entertainment or for business makes a difference in how your aviation expenses are taxed. Some owners use their aircraft for a combination of the two, which can lower your taxes when used in the ideal proportions. Aviation lawyers can help you determine what is your ideal aircraft usage for minimal taxes.
As an airline employee, depending on your position within the airline, the federal excise tax on air transportation may affect you to varying degrees. Taxes affect the overall bottom line of the airline, which may determine how many employees the airline can afford to hire and may direct layoffs if necessary.
If you happen to work in the administrative or accounting departments of the airline, you may deal directly with taxes and compliance with tax laws. You may need an aviation lawyer to help you ensure that taxes are being paid properly on behalf of the airline.
As an airline passenger, the taxes on commercial airlines may affect you in the form of ticket prices. The price of tickets may increase or decrease based on the tax implications the airline is currently experiencing. Also, any time you purchase a ticket for a flight the excise tax of 7.5% will be applied.
In addition to passengers, commercial airlines also transport products. Anything you purchase that is transported via aircraft may be priced with the federal excise tax taken into account. Of course, sales tax also applies to purchases, so your products are essentially doubly taxed when air transportation is involved.
The Excise Tax Holiday Under the CARES Act
You may be aware that the federal government declared a holiday for the excise tax under the CARES Act (Coronavirus Aid, Relief, and Economic Security). The holiday extended from March 28, 2020, through December 31, 2020, and during this time the excise tax was not applied. Although this holiday period has passed, it may still affect your tax filing for the year 2020.
How Can Aviation Lawyers Help Me With Taxes?
Tax specialists and accountants are usually the experts on taxes for individuals and businesses. However, high asset taxes, especially those pertaining to air transportation, are more complex and require a deeper understanding. Aviation Lawyers can interpret the tax laws that govern the way your airline or private aircraft is taxed to ensure you are in compliance.
Need Aviation Lawyers in Austin, TX? Contact Kelly Legal Group
If you’re in need of legal advice regarding the federal excise tax on air transportation for your business or private aircraft, Kelly Legal Group can help. We are aviation lawyers in Austin, Texas who understand the complex tax laws regarding air transportation and can help you ensure you are handling your taxes legally and in your best financial interest.