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Business aviation groups have objected to President Joe Biden’s focus on business aviation in discussing new tax policy as part of efforts to reduce the deficit during the State of the Union address.

The National Business Aviation Association and the Alliance for Aviation Across America each issued statements following the President’s speech defending corporate use of private jets and pointing out the business aviation sector’s contribution to the U.S. economy.

Biden Announces Crackdown On Business Jet Tax Loopholes

President Biden made “cracking down on corporate jet loopholes” a part of his deficit-fighting strategy announced during his speech.

A White House statement explaining President Biden’s agenda asserts, “Corporations and wealthy people who use corporate and private jets should pay their fair share. That’s why he would eliminate a tax break that gives preferential treatment to corporate jets, compared to commercial aircraft. He would also increase the fuel tax on corporate and private jet travel, so that corporate executives and other wealthy Americans pay their fair share for the use of airspace and other public services related to air travel.”

President Biden also announced he would grant the Internal Revenue Service more significant resources to “crack down on high-end tax evasion like deducting personal use of corporate jets as a business expense.”

In February, the IRS revealed it planned to conduct “dozens of audits on business aircraft involving personal use.”

The IRS is focusing on “aircraft usage by large corporations, large partnerships and high-income taxpayers” to determine whether jet owners have filed personal jet flights as business expenses. The IRS said this potential misfiling “has not been closely scrutinized during the past decade” due to strained agency resources.

IRS Commissioner Danny Werfel said in the announcement, “Personal use of corporate jets and other aircraft by executives and others have tax implications, and it’s a complex area where IRS work has been stretched thin. With expanded resources, IRS work in this area will take off. These aircraft audits will help ensure high-income groups aren’t flying under the radar with their tax responsibilities.”

NBAA and AAAA Defend Business Jet Use

The National Business Aviation Association objected to President Biden’s speech, saying he had “unfairly chosen to target those who use business aviation.”

NBAA President and CEO Ed Bolen said, “The vast majority of flights are taken by U.S. companies to help them compete effectively in a global marketplace.”

Bolen highlighted business aviation’s role in resolving the connectivity gap left by commercial aviation by helping company representatives “access hard-to-reach communities across the country with little or no airline service.”

Bolen also pointed out that “the president’s own Cabinet members sometimes use business aircraft to do their jobs and visit with people in towns and cities across the nation.”

Devin Osting, interim executive director of the Alliance for Aviation Across America, a group representing Fixed-Base Operators, small airports, and the general aviation community, said, “The President’s comments unfairly singled out the business aviation industry—an industry that supports an economic impact of $247 billion and 1.2 million American jobs.”

Like Bolen, Osting highlighted business aviation’s role in filling the airline service gap.

“These companies utilize business aviation to maintain a full and flexible schedule of meetings, especially in regions where other travel options are limited or time-consuming; to make multiple stops within a single business-travel mission; or, to carry specialized equipment or demonstration materials,” he said.

Addressing the announced tax audits, Bolen said, “The IRS has not identified a compliance gap in business aviation.”

While the IRS announced that the tax audits will focus on large corporations and high-net-worth individuals, the NBAA says, “Most organizations using business aviation are small or medium-sized businesses.”

In defense of the business aviation sector, Bolen highlighted its contributions: “It supports jobs, connects communities, helps companies succeed and provides humanitarian lift in times of crisis. This is an industry that should be promoted, not pilloried.”

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