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Business aviation groups are objecting to President Joe Biden’s focus on business aviation in his State of the Union address as he discusses new tax policies as part of efforts to reduce the deficit.
Following the president’s speech, the National Business Aviation Association and the National Aviation Alliance each released statements defending the use of private jets by businesses and pointing to the business aviation sector’s contributions to the U.S. economy.
Biden announces crackdown on business jet tax loopholes
President Biden announced in his speech that he would “crack down on the corporate jet loophole” as part of his strategy to tackle the budget deficit.
A White House statement explaining President Biden’s agenda argues that “companies and wealthy individuals who fly corporate and private jets should pay their fair share.” This is why the tax breaks that give corporate jets preferential treatment compared to commercial aircraft will be abolished. He also would raise fuel taxes on corporate and private jet travel to help business owners and other wealthy Americans pay their fair share for airspace use and other public services associated with air travel. right. ”
President Biden also announced that he would give the Internal Revenue Service more resources to “crack down on costly tax evasion, such as deducting the personal use of a company jet as a business expense.”
In February, the IRS announced plans to conduct “dozens of audits of privately used business aircraft.”
The IRS focuses on “the use of aircraft by large corporations, large partnerships, and high-income taxpayers” to determine whether jet owners report private jet flights as business expenses. The IRS said this potential misreporting “has not been subject to rigorous scrutiny over the past decade” because the agency’s resources are strained.
“Personal use of corporate jets and other aircraft by corporate executives and other businesses has tax implications, and this is a complex area where the IRS is stretched thin,” IRS Commissioner Danny Wuerffel said in a statement. It is a very important field.” The expanded resources will ramp up his IRS efforts in this area. These aircraft audits help ensure that high-income earners are not acting in disregard of their tax obligations. ”
NBAA and AAAA defend business jet use
The National Business Aviation Association objected to President Biden’s speech, saying he “unfairly targeted people who fly business.”
“The vast majority of flights are used by American companies to help them compete effectively in global markets,” said NBAA President and CEO Ed Bolen.
Bolen sees business aviation’s role in solving the connectivity gap left by commercial aviation by helping corporate representatives “reach hard-to-reach areas across the country with little or no air service.” emphasized.
Bolen also noted that “the president’s own Cabinet members sometimes use business aircraft to conduct business and visit people in towns and cities across the United States.”
Devin Osting, interim executive director of the Alliance for Aviation Across America, a group representing fixed-base operators, small airports and the general aviation industry, said, “The president’s comments are unfairly targeting the business aviation industry.” In other words, it gives special consideration to industries that support the development of society.” $247 billion in economic impact and 1.2 million American jobs. ”
Like Bolen, Osting emphasized the role of business aviation in filling airline service gaps.
“These companies rely on business aviation to maintain a complete and flexible meeting schedule, especially in areas where other travel options are limited or time-consuming. or to transport specialized equipment or demonstration materials,” he said.
Regarding the announced tax audit, Bolen said, “The IRS has not identified any compliance gaps in business aviation.”
While the IRS has announced that its tax audits will focus on large corporations and wealthy individuals, the NBAA says that “the majority of organizations using business aviation are small and medium-sized businesses.”
In defending the business aviation sector, Bolen highlighted its contribution, saying it “supports jobs, connects communities, helps businesses succeed, and provides humanitarian assistance in times of crisis. This is an industry that should be treated and should not be shamed.”
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