When flying private you may think that only US jets have to pay US taxes. However taxes are applicable for all charter flights that enter or leave the United States. Even some international flights, such as in Canada and Mexico are subject to tax collection if within 225 miles of the United States border. It is essential to know taxes for private jet charters, as these can consequently increase total cost.
What are the Taxes For Private Jets
There are four different taxes that apply to private jet charters in the United States. Federal Excise Tax (FET), Domestic Segment Fees ($4.20) , International Head Tax($18.60) and Hawaii/ Alaska Head Tax($9.30). FET Taxes are charged based on all costs of air transportation. These costs include: other taxes, repositioning, landing fees, and crew expenses. FET taxes differ depending on the type of cargo. Transporting Passengers results in a 7.5% FET tax, while only 6.25% is charged for the transportation of property. Domestic Segment Fees are charges per person per occupied leg for flights in the United States. This fee is typically $8.00 per person. The operator of the aircraft is responsible for executing this charge.
International Head taxes are additional fees charged by international entities. Hawaii/ Alaska head taxes are additional taxes charged based on flights from and to that area. Therefore, it is important to consider these factors.
FET Tax Exemptions
Small Aircrafts of 6,000 pounds or less that do not regularly travel between definite points are therefore exempt from FET taxes. International flights that are stopping in the United States just to refuel and continue to an international destination are likewise FET tax exempt. Additionally, portions of flights that fly over international waters are FET exempt during that leg of the flight.
Domestic Segment Fee Exceptions
When a leg of the charter flight is to or from a rural airport, then the domestic segment fee is not applicable. A rural airport is one in which less than 100,000 passengers depart on commercial flights during the calendar year.
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