Business aviation organizations are reminding that the CARES Act tax holiday for certain federal excise taxes involving commercial air transportation was not extended under the latest Covid relief bill and has now expired.
For air transportation passenger taxes, the rates return to 7.5 percent per person in 2021. The domestic segment fee is $4.30, while the international head tax increases to $19.10 per person and the Alaska/Hawaii fee is $9.60, according to NBAA tax guidance. Also returning is the 4.3-cent-per gallon assessed for commercial use of aviation fuel (the 0.1-cents-per-gallon Leaking Underground Storage Tank tax was not included in the tax holiday, nor were the fuel taxes on non-commercial aviation fuel), as well as the 6.25 percent cargo tax.
NBAA has updated its Federal Excise Taxes Guide for 2021, providing information on the reinstatement of FET and other critical tax information for the industry.
Meanwhile, the National Air Transportation Association is further advising small businesses to reach out to their banks regarding the second round of Paycheck Protection Program relief immediately to start the process. The Treasury Department in addition is anticipated to open the portal as soon as today for applications surrounding the air carrier-focused Payroll Support Program. Both programs, the former for small businesses and the latter for commercial carriers and related companies, provide forgivable loans to cover employee compensation.