Transcript:

FET is Federal excise tax, and it’s another tax to be mindful of when you’re owning or operating a business aircraft. Federal excise tax applies to the purchase or sale of air transportation services. It’s very commonly charged if you buy a commercial air ticket, or if you’re chartering an aircraft or selling charter services on your aircraft, FET would almost always apply. FET however can also apply to certain part 91 operations of an aircraft if aircraft transportation services are being sold. The definition of the sale of aircraft transportation services can differ on the FAA side of things and the IRS side of things, so it’s very important that when you structure how aircraft expenses are paid, and who is paying those expenses and how they’re billed, that you be mindful of not exposing yourself to FET that otherwise shouldn’t apply.