Comments on: Tax day: What are those taxes and fees you pay when you travel? And are you getting screwed?

By: rich (richmanwisco)

rich (richmanwisco) — Fri, 20 Apr 2007 02:37:56 +0000

Unfortunately you fell for a poorly written and researched piece by Bob Porterfield which portrayed the $102 billion contribution of general aviation to the nation’s economy in a negative light. While commercial aviation (the airlines) contribute $0 to the cost of the nation’s air traffic control system (the passengers are paying the surcharge, not the airlines), general aviation contributes its share through a fuel surcharge on each gallon of fuel purchased. It is a system that has worked efficiently for the last 40+ years.

For a perspective from the other side of the FAA funding debate, please have a look at the following links:

http://www.aopa.org/faafundingdebate/
http://www.aopa.org/whatsnew/newsitems/2007/070416ap.html
http://www.gaservingamerica.org/Serving_All.htm

By: Mark Ashley

Mark Ashley — Tue, 17 Apr 2007 19:14:05 +0000

Thanks for your comment, Rick.

I note, however, that your numbers relate only to jets that are hired by the hour, and not those that are operated by their owners or their employees. If GM flies their executives from point A to point B in a GM-owned jet, it doesn’t pay the segment or 7.5% taxes, if I understand correctly.

So what percentage of private jets are chartered or fractionally-owned, vs. operated by their owners?

By: Rick Colson

Rick Colson — Tue, 17 Apr 2007 15:12:33 +0000

Airline passengers pay a 7.5% excise tax on the ticket price. Private jets and aircraft flown for hire – private charters and fractionals – also pay the same 7.5% tax imposed on private charter and fractional jet passengers PLUS an approx. 4% total fuel tax and the same segment fees. A Gulfstream jet chartering at $6,000/hour is taxed $450 per hour of flight PLUS the fuel tax and segment fees, and thousands of private jet charters fly every day.

The FAA uses this money to support the system and a majority goes to support Air Traffic Control and major airports, which are avoided by private aircraft whenever possible in favor of smaller airports with easier access for the community.

Private aircraft avoid major airports which only reduces crowding and delays at the major airports for the airlines and passengers, and helps spread aviation and airport usage more evenly- locally, state and nation wide.

Thank you for the opportunity to comment.

See here for a summary of amounts taxed to private aircraft: http://web.nbaa.org/public/govt/testimony/20050504.php

See here for the IRS exact details on private aircraft and fuel taxes.
http://www.irs.gov/publications/p510/index.html