Title: 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.
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.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 321 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                 S. 321

 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 SENATE OF THE UNITED STATES

             February 7 (legislative day, February 6), 2017

Mr. Brown (for himself and Mr. Portman) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 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--
                            ``(i) assisting an aircraft owner with 
                        administrative and support services, such as 
                        scheduling, flight planning, and weather 
                        forecasting,
                            ``(ii) obtaining insurance,
                            ``(iii) maintenance, storage and fueling of 
                        aircraft,
                            ``(iv) hiring, training, and provision of 
                        pilots and crew,
                            ``(v) establishing and complying with 
                        safety standards, and
                            ``(vi) such other services as are 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.--In the case of amounts 
                paid to any person which (but for this subsection) are 
                subject to the tax imposed by subsection (a), a portion 
                of which consists of amounts described in subparagraph 
                (A), this paragraph shall apply on a pro rata basis 
                only to the portion which consists of amounts described 
                in such subparagraph.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to amounts paid after the date of the enactment of this Act.
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