NATA-Sought Provisions Retained in Tax Reform Legislation
Bill Encourages Investment and Provides Certainty for Aviation Businesses
Washington, DC, December 20, 2017 – Today, Congress approved The Tax Cuts and Jobs Act (H.R. 1), which overhauls the nation’s tax code and contains pro-aviation business provisions long-sought by NATA and its members. President Trump is expected to sign the legislation into law.
“NATA thanks the Congressional leadership and the House and Senate tax-writing committees for recognizing the importance to aviation businesses nationwide of pro-investment tax policies, including full and immediate expensing and provisions that provide certainty as to the tax status of aircraft management services,” stated NATA President Martin H. Hiller.
Aircraft Management Services – The final version of the bill 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 bill 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 recognizes Senators Brown and Portman and Representative Tiberi, who listened to the needs of aviation businesses and fought on their behalf. We also want to thank NATA members for their support during this multi-year battle and their recent action in letting their Senators and Representatives know of the importance of these provisions to their businesses,” concluded Hiller.
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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