Contents
- (a) In general3 changes
- (b) Domestic segments of taxable transportation4 changes
- (c) Use of international travel facilities4 changes
- (d) By whom paid
- (e) Special rules15 changes
- (f) Exemption for certain uses4 changes
- (g) Exemption for air ambulances providing certain emergency medical transportation6 changes
- (h) Exemption for skydiving uses1 change
- (i) Exemption for seaplanes1 change
- (j) Exemption for aircraft in fractional ownership aircraft programs13 changes
- (k) Application of taxes7 changes
(e)
(1)
(A)The tax imposed by subsection (b)(1) shall not apply to any domestic segment beginning or ending at an airport which is a rural airport for the calendar year in which such segment begins or ends (as the case may be).
(B)For purposes of this paragraph, the term “rural airport” means, with respect to any calendar year, any airport if—
(i)there were fewer than 100,000 commercial passengers departing by air (in the case of any airport described in clause (ii)(III), on flight segments of at least 100 miles) during the second preceding calendar year from such airport, and
(ii)such airport—
(I)is not located within 75 miles of another airport which is not described in clause (i),
(II)is receiving essential air service subsidies as of the date of the enactment of this paragraph, or
(III)is not connected by paved roads to another airport.
(2)In the case of amounts paid outside the United States for taxable transportation, the taxes imposed by subsections (a) and (b) shall apply only if such transportation begins and ends in the United States.
(3)
(A)Any amount paid (and the value of any other benefit provided) to an air carrier (or any related person) for the right to provide mileage awards for (or other reductions in the cost of) any transportation of persons by air shall be treated for purposes of subsection (a) as an amount paid for taxable transportation, and such amount shall be taxable under subsection (a) without regard to any other provision of this subchapter.
(B)For purposes of subparagraph (A), a corporation and all wholly owned subsidiaries of such corporation shall be treated as 1 corporation.
(C)The Secretary shall prescribe rules which reallocate items of income, deduction, credit, exclusion, or other allowance to the extent necessary to prevent the avoidance of tax imposed by reason of this paragraph. The Secretary may prescribe rules which exclude from the tax imposed by subsection (a) amounts attributable to mileage awards which are used other than for transportation of persons by air.
(4)
(A)In the case of taxable events in a calendar year after the last nonindexed year, the $3.00 amount contained in subsection (b) and each dollar amount contained in subsection (c) shall be increased by an amount equal to—
(i)such dollar amount, multiplied by
(ii)the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting the year before the last nonindexed year for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any increase determined under the preceding sentence is not a multiple of 10 cents, such increase shall be rounded to the nearest multiple of 10 cents.
(B)For purposes of subparagraph (A), the last nonindexed year is—
(i)2002 in the case of the $3.00 amount contained in subsection (b), and
(ii)1998 in the case of the dollar amounts contained in subsection (c).
(C)For purposes of subparagraph (A), in the case of the tax imposed by subsection (b), the beginning of the domestic segment shall be treated as the taxable event.
(D)If an amount is paid during a calendar year for a domestic segment beginning in a later calendar year, then the rate of tax under subsection (b) on such amount shall be the rate in effect for the calendar year in which such amount is paid.
(5)
(A)No tax shall be imposed by this section or section 4271 on any amounts paid by an aircraft owner for aircraft management services related to—
(i)maintenance and support of the aircraft owner’s aircraft, or
(ii)flights on the aircraft owner’s aircraft.
(B)For purposes of subparagraph (A), the term “aircraft management services” includes—
(i)assisting an aircraft owner with administrative and support services, such as scheduling, flight planning, and weather forecasting,
(ii)obtaining insurance,
(iii)maintenance, storage and fueling of aircraft,
(iv)hiring, training, and provision of pilots and crew,
(v)establishing and complying with safety standards, and
(vi)such other services as are necessary to support flights operated by an aircraft owner.
(C)
(i)For purposes of this paragraph, the term “aircraft owner” includes a person who leases the aircraft other than under a disqualified lease.
(ii)For purposes of clause (i), the term “disqualified lease” means a lease from a person providing aircraft management services with respect to such aircraft (or a related person (within the meaning of section 465(b)(3)(C)) to the person providing such services), if such lease is for a term of 31 days or less.
(D)In the case of amounts paid to any person which (but for this subsection) are subject to the tax imposed by subsection (a), a portion of which consists of amounts described in subparagraph (A), this paragraph shall apply on a pro rata basis only to the portion which consists of amounts described in such subparagraph.
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