THE BIDEN ADMINISTRATION TARGETS PRIVATE JET OWNERSHIP
April 29, 2024
On March 11, 2024, the White House released a fact sheet which included proposed changes to the tax treatment of corporate jet purchases and calls for a fuel tax increase on private jet travel. Specifically, the proposal seeks to eliminate a preferential tax treatment used by wealthy individuals to write off corporate jet purchases. A business or wealthy individual can currently write off a corporate jet purchase over five years while commercial purchases can only be written off over a seven-year period. To end alleged abuses of corporate jet write-offs, the proposal would impose the seven-year tax treatment on corporate jet purchases, raising an estimated $4 billion over ten years. Similarly, the proposed fuel tax increase would raise an estimated $1.1 billion over five years by gradually increasing the tax on fuel used by private jets from approximately $0.22 per gallon to $1.06 per gallon within five years. Revenues from the fuel tax on private jet travel partly fund the Airport and Airway Trust Fund, a financing mechanism for aviation-related federal investments. According to the White House, corporations and wealthy Americans unfairly benefit from aviation-related federal investments because private jet travel accounts for approximately 7% of all flights handled by FAA but contributes less than 1% of the taxes into the Airport and Airway Trust Fund. While both the proposed elimination of the corporate jet purchase tax write-off and the proposed fuel tax increase require congressional approval, the changes could cost private jet owners billions more in taxes if implemented.
If you have any questions, please contact Evelyn Sahr at 202.659.6622 or esahr@eckertseamans.com; Drew Derco at 202-659-6665 or dderco@eckertseamans.com; Jay Julien at 202.659.6648 or jjulien@eckertseamans.com, or any other attorney at Eckert Seamans with whom you have been working.
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