Congressional leaders in Washington D.C. are still trying to work out additional relief for companies and individuals impacted by the COVID-19 pandemic. Don’t expect an extension of the holiday for the 7.5% Federal Excise Tax (FET).
“With the way the current stimulus discussions are progressing, I think the chances of the FET suspension being included at the last minute are low. I just don’t think there is an appetite for engaging in tax policy debates after the fallout from some of the tax changes made through the CARES Act,” Scott O’Brien, senior director of government affairs at the National Business Aviation Association, tells Private Jet Card Comparisons.
He adds, “There is no discussion on Capitol Hill that I am aware of to extend the FET suspension beyond the end of this year. This round of COVID-19 relief negotiations that has stretched on for many months has really not addressed tax policy as was done in the CARES Act.”
The end of the holiday will end a series of promotions by more than a dozen jet card sellers. They’ve been selling that funds deposited before the end of the year will generate tax-free flights until funds are used or expire. The deals have received widespread media attention, including CNBC.
Among those jet card providers that have some type FET-free offers or bonuses instead are Airshare, Airstream Jets, Alliance Aviation, Concord Private Jet, Dumont Aviation Group, Exec1 Aviation, ExpertJet, Flexjet, FlyExclusive, FXAIR, Jet Linx Aviation, JetSet Group, Jets.com, Magellan Jets, NetJets, Nicholas Air, Sentient Jet, and Wheels Up.
Implemented as part of the wide-ranging CARES Act, FET collections were suspended at the end of March. The holiday goes through the end of 2020. The 7.5% tariff applies to flights within the Continental U.S. It is also charged for flights starting or ending within 200 nautical miles of the northern and southern borders.
The FET holiday not connected to the payroll support offered for private aviation companies. With private aviation companies still operating around 10-20% below normal, there could be more support for eligible operators. Overall, the industry is responsible for over one million domestic jobs.