Tax Reform Legislation Contains NATA Supported Pro-Aviation Business Provisions

 

Washington, DC, December 15, 2017 – Today, House/Senate conferees released the final version of The Tax Cuts and Jobs Act (H.R. 1) preserving two pro-aviation business provisions supported by NATA. 

“NATA is deeply appreciative that Chairman Brady, Chairman Hatch and the other conferees retained provisions in the tax bill that provide our member companies with long-sought certainty as to the tax status of aircraft management services and encourage investment in the new and used aircraft markets,” stated NATA President Martin H. Hiller.

Aircraft Management Services – The conference report retains Senate language clarifying that aircraft management services are not subject to the 7.5 percent commercial ticket tax. The provision, supported by NATA, was necessitated by a 2012 IRS Chief Counsel opinion that left aircraft management service companies – most of them small businesses – vulnerable to back taxes and penalties. After a significant number of these companies successfully appealed audit findings assessing the FET to aircraft management services, the IRS opinion was put on hold in May of 2013 pending further clarification.

Expensing – NATA has long-supported full and immediate expensing as a cornerstone of tax reform. The conference report makes immediate expensing available to both new and used equipment, particularly important given the fact the legislation also repeals Like-Kind Exchanges (IRS Sec. 1031). While the House language supported the immediate expensing of new and used equipment, the related Senate provision was limited to new equipment, potentially undermining the stability of the used aircraft market. 

“NATA thanks Senators Brown and Portman and Representative Tiberi for their tireless efforts on our behalf. We also want to thank NATA members who responded to our recent legislative call to action and let their Senators and Representatives know of the importance of these provisions to their businesses,” concluded Hiller.

The conference report is expected to be considered by the House and Senate early next week.


The National Air Transportation Association (NATA) has been the voice of aviation business for over 75 years. Representing nearly 2,300 aviation businesses, NATA’s member companies provide a broad range of services to general aviation, the airlines and the military and NATA serves as the public policy group representing the interests of aviation businesses before Congress and the federal agencies. For more information about NATA, please visit www.nata.aero, www.twitter.com/nataaero or www.facebook.com/nataaero.