We use cookies to give you the best online experience. By using our website you agree to our use of cookies in accordance with our cookie policy. Learn more here.Close Me
Chief Counsel Memorandum No. 201210026 was released on March 9,
2012. The Memorandum appears to broaden the applicability of
Federal Excise Tax (FET) to arrangements where an FAR Part 91
operator retains a manager for its aircraft and/or retains an FAR
Part 135 Air Carrier to place the aircraft on the Air Carrier
Certificate for aircraft charter.
The Memorandum focuses on the factors involving
"possession, command and control of the aircraft" and
describes three scenarios involving an owner hiring a management
company for Part 91 operations, an owner hiring a management
company for Part 91 operations and allowing additional related
entities that are not members of the affiliated group to use the
aircraft and an owner allowing the management company to operate
the aircraft for charter services when the owner is not using the
aircraft.
The Memorandum specifically indicates control of pilots as a
factor in determining possession, command and control, along with
other factors.
The IRS concluded in each situation that FET was applicable as
the manager/charter air carrier had possession, command and control
of the aircraft and is providing taxable transportation to the
owner. The amount subject to FET would include management fees.
The Memorandum is fact-specific. It is recommended that FAR Part
91 Management Agreements and/or Air Carrier Charter Management
Agreements be reviewed in light of the position being taken by the
IRS in the Memorandum.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
Missouri Senators Clare McCaskill and Christopher Bond, concerned about the seniority integration treatment of employees at Trans World Airlines ("TWA") following its purchase by American Airlines and integration of the two airlines' operations and workforce, introduced legislation to guarantee labor protective provisions to airline employees with respect to seniority integration for certain covered transactions.
In a case of first impression, the New York Court of Appeals has held that a court need not undertake a conflicts-of-laws analysis when there is an express choice of New York law in a contract pursuant to New York General Obligations Law §5-1401.
The Department of State and the Department of Commerce are planning to move certain military aircraft, aircraft engines, and specially designed aircraft parts and components off of the U.S. Munitions List.
The European Union Emissions Trading System faced serious international opposition in 2012 for seeking to include carbon emissions from flights into and out of the EU under the ETS regulatory umbrella.
The United States Federal Maritime Commission (FMC) has issued a Notice of Proposed Rulemaking under which foreign unlicensed Non-Vessel Operating Common Carriers (NVOCCs) will be allowed to register with the Commission and begin using Negotiated Rate Agreements (NRAs) with their shippers.
