Title: To amend the Internal Revenue Code of 1986 to exempt amounts paid for aircraft management services from the excise taxes imposed on transportation by air.
Policy area: Taxation

Summary:
This bill amends the Internal Revenue Code to exempt from the excise tax on transportation of persons and property by air amounts paid by an aircraft owner or lessee for aircraft management services related to maintenance and support of the aircraft or flights on such aircraft.
Aircraft management services include assisting an aircraft owner with administrative and support services; obtaining insurance; maintenance, storage and fueling of aircraft; hiring, training, and provision of pilots and crew; establishing and complying with safety standards; or other services necessary to support flights operated by an aircraft owner.
In the case of an aircraft owner that is wholly-owned by another person, amounts paid by the other person on behalf of the aircraft owner must be treated as having been paid directly by the aircraft owner.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 896 Introduced in House (IH)]

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115th CONGRESS
  1st Session
                                H. R. 896

 To amend the Internal Revenue Code of 1986 to exempt amounts paid for 
     aircraft management services from the excise taxes imposed on 
                         transportation by air.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 6, 2017

 Mr. Tiberi (for himself, Mrs. Beatty, Mr. Kelly of Pennsylvania, Mr. 
Renacci, Mr. Stivers, and Mr. Wenstrup) introduced the following bill; 
         which was referred to the Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to exempt amounts paid for 
     aircraft management services from the excise taxes imposed on 
                         transportation by air.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. AMOUNTS PAID FOR AIRCRAFT MANAGEMENT SERVICES.

    (a) In General.--Subsection (e) of section 4261 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(5) Amounts paid for aircraft management services.--
                    ``(A) In general.--No tax shall be imposed by this 
                section or section 4271 on any amounts paid by an 
                aircraft owner for aircraft management services related 
                to--
                            ``(i) maintenance and support of the 
                        aircraft owner's aircraft; or
                            ``(ii) flights on the aircraft owner's 
                        aircraft.
                    ``(B) Aircraft management services.--For purposes 
                of subparagraph (A), the term `aircraft management 
                services' includes assisting an aircraft owner with 
                administrative and support services, such as 
                scheduling, flight planning, and weather forecasting; 
                obtaining insurance; maintenance, storage and fueling 
                of aircraft; hiring, training, and provision of pilots 
                and crew; establishing and complying with safety 
                standards; or such other services necessary to support 
                flights operated by an aircraft owner.
                    ``(C) Lessee treated as aircraft owner.--
                            ``(i) In general.--For purposes of this 
                        paragraph, the term `aircraft owner' includes a 
                        person who leases the aircraft other than under 
                        a disqualified lease.
                            ``(ii) Disqualified lease.--For purposes of 
                        clause (i), the term `disqualified lease' means 
                        a lease from a person providing aircraft 
                        management services with respect to such 
                        aircraft (or a related person (within the 
                        meaning of section 465(b)(3)(C)) to the person 
                        providing such services), if such lease is for 
                        a term of 31 days or less.
                    ``(D) Pro rata allocation.--If any amount paid to a 
                person represents in part an amount paid for services 
                not described in subparagraph (A), the tax imposed by 
                subsection (a), if applicable to such amount, shall be 
                applied to such payment on a pro rata basis.
                    ``(E) Certain payments treated as made by aircraft 
                owner.--In the case of an aircraft owner which is 
                wholly-owned by another person, amounts paid by such 
                other person on behalf of such aircraft owner shall be 
                treated for purposes of this paragraph as having been 
                paid directly by such aircraft owner.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid beginning after the date of the enactment of this Act.
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