April 11, 2024
Jet card broker Magellan Jets is wading into what could be a hot topic for the rest of the year.
Can you save the 7.5% Federal Excise Tax on jet card charter flights in 2021 if you buy before the end of the year? As part of the CARES Act, the collection of the tax is suspended through Dec. 31, 2020. Unless new legislation is put into place, it will go back into effect on Jan. 1, 2021.
The tax applies to domestic flights and those that begin or end within 225-miles of the Canadian and Mexican borders.
In an email to prospects, the company wrote, “As part of the CARES Act, guests who invest in their private travel by Dec. 31, 2020, can fly at any time in 2021 and beyond—with all purchases exempt from the 7.5% federal excise tax. Magellan Jets extends additional benefits by offering longer contract terms on hours purchased before the end of year.”
Magellan Jets calculated FET savings of $94,185 when buying 100 hours in its Gulfstream G450 program. For its entry-level Hawker 400XP light jet program, you would save $40,395 (This article continues below the chart).
According to the offer, the cards are valid for 30 to 48 months, or until you use the funds. The upfront investment to buy 100 hours of jet card flight time ranges from $538,600 to $1,255,800.
Speaking to Private Jet Card Comparisons, Magellan Jets’ president Anthony Tivnan said, “With recent clarification to the CARES Act, Magellan Jets is pleased to assist organizations and individuals in planning their business continuity plan and tax savings strategy for the next several years.”
He added, “This stimulus incentivizes companies, many of whom were not using business aviation pre-COVID, to get back to business with a safe, secure, and healthy solution. Due to the strain, COVID has had on commercial airlines, not only from a safe in-cabin perspective but also the number of routes being cut and non-stop flights available, travel has become another obstacle many companies are facing today.”.
