Fractional Aircraft Ownership Firm Blasts ‘Ticket Tax’ on Appeal

A 7.5% excise tax on fees, fuel surcharges, and other costs charged to air transportation customers shouldn’t apply to fractional aircraft ownership programs because they’re more akin to management services, Ohio-based Flight Options LLC told a federal appeals court Friday.

Congress didn’t intend IRC Section 4261, which imposes the tax on taxable transportation, to apply to fractional ownership programs. But the IRS’s imposition of the tax, penalties, and interest on Flight Options to the tune of $40 million would “drastically expand” that definition beyond the commercial airline industry, applying what’s colloquially known as the “ticket tax” where it doesn’t ...