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Latest tax, regulatory changes detailed in NBAA’s personal use of Business Aircraft Handbook

The National Business Aviation Association (NBAA) has released a comprehensive update to its Personal Use of Business Aircraft Handbook, which provides valuable tax and regulatory compliance strategies when a company makes an aircraft available for non-business use.

“Employee security concerns and ongoing pandemic-related travel changes may lead companies to occasionally make business aircraft available to employees for non-business use,” noted Scott O’Brien, NBAA senior director for public policy and advocacy.

Personal use of business aircraft is a complex policy area, governed by the Internal Revenue Service (IRS), Securities and Exchange Commission (SEC) and Federal Aviation Administration (FAA).

The NBAA Personal Use of Business Aircraft Handbook – a members-only resource – summarizes these tax rules for company reporting purposes and for governing the calculation of a company’s nondeductible expenses under the entertainment disallowance.

The handbook also covers tax deduction rules for sole proprietors and employee-provided flights.

View the NBAA Personal Use of Business Aircraft Handbook.

“The Personal Use Handbook helps companies, chief financial officers, advisors and legal representatives to navigate this challenging regulatory environment,” explained O’Brien.

“This is an important resource for flight department personnel who often work with their company’s tax department and outside counsel to assist in the recordkeeping and classification of flights.”

The updated handbook also includes detailed charts summarizing income inclusion and deductions, with examples for employer companies and sole proprietors, as well as new deduction-disallowance rules for commuting and business entertainment flights as stipulated by the Tax Cuts and Jobs Act of 2017.

“The NBAA Tax Committee worked collaboratively to finalize this updated guidance,” O’Brien said.

“In particular, the association extends its thanks to committee members Ruth Wimer, with Winston & Strawn LLP, and Sue Folkringa, with Aviation CPAs, for their leadership in the update process, and to John Hoover, with Holland & Knight LLP, for his expertise as the lead reviewer.”