April 18, 2024
Add Directional Aviation’s FXAIR to the list of jet card and membership sellers that offer customers the ability to avoid the 7.5% Federal Excise Tax for 2021 and beyond. Sister brands Flexjet and Sentient Jet earlier announced similar deals.
The offer takes advantage of the CARES Act, which suspended the Federal Excise Tax collection through the end of the year. The move was part of a laundry list of initiatives to bolster the aviation segment, hard hit by COVID-19.
In private aviation, the FET holiday has been an element in its successful rebound as consumers seek to avoid the coronavirus and navigate minimized airline schedules.
While the tax is due to go back into effect on Jan. 1, 2020, any tickets or charter flights booked and paid for by year’s end are FET exempt as the taxable event is the date of sale.
With jet cards and membership, there is no definitive guidance from the IRS. You can read our analysis here.
However, jet card and membership sellers have received legal advice that has led them to believe funds deposited this year will be tax-exempt into 2021 and beyond.
In Aviation +, the minimum deposit is $100,000, although its president Gregg Slow says at least one customer is looking to deposit up to $2 million.
It’s an amount Slow says the customer will spend in less than a year. He said in discussion with customers this week; most are looking at making deposits to cover one to two years of flights.
Deposits in Aviator + are not eligible to be held in FXAIR’s escrow account program.
In other news, Slow said FXAIR is eyeing an office in Los Angeles by 2022. It recently moved into a new headquarters in New York City at 605 Third Avenue, the same building as the one-time world headquarters of TWA.
In conjunction with the new office space, FXAIR is making a $20,000 donation to the Relief Opportunities for All Restaurants (ROAR) New York City Restaurant Employee Relief Fund. ROAR grants are awarded to restaurant workers in New York City facing unprecedented economic hardship as a result of the Covid-19 pandemic. The grant program is managed by Robin Hood, New York City’s largest poverty-fighting organization.
FXAIR also has an office in Quincy, Boston, and a home-based sales team in South Florida.
In addition to using vetted third-party operators, FXAIR accesses Flexjet operates Challenger 300 and Global Express private jets that had left its sister company’s fractional program. Slow said in the future that access might extend to Nextant 400XTis recently returned from Europe, as well as Phenom 300 light jets.
