Private Jet Firm’s $39 Million Judgment Reversed on Appeal (1)

An Ohio-based fractional aircraft ownership company no longer owes about $39 million because a 7.5% excise tax on some air transportation costs doesn’t apply to fixed overhead and management fees, the Sixth Circuit held Wednesday, reversing a lower court’s ruling.

Flight Options LLC doesn’t owe taxes on its fixed monthly management and overhead fees under IRC Section 4261 because those fees don’t constitute payments ‘for transportation by air,’ Chief Judge Jeffrey S. Sutton wrote for US Court of Appeals for the Sixth Circuit. He said that the tax, created in 1956, doesn’t extend to these fees that the company charged ...