Transcript:

FET as we call it in the industry or commonly fully referred to as federal excise tax, can in fact apply to part ninety-one operations. This is a bit of a hot topic between the IRS and aircraft operators, because federal excise tax is supposed to be a tax on air transportation services, and generally is understood to be a tax on a provider of air transportation services. That said, an aircraft flying under part ninety-one rather than under commercial carriage or charter carriage regulations can be subject to FET if there’s a payment that’s being made both for plane and pilot. The use of part ninety-one alone will not determine whether or not the IRS will seek to apply federal excise tax to an individual flight.