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Business Air News Bulletin
Business Air News Bulletin
The monthly news publication for aviation professionals.
Organisations warn of budget harm to an essential American industry
President Biden has unveiled an FY25 budget plan that includes a five-fold fuel tax increase on business aviation as well as changed depreciation schedule for a purchased business aircraft from five to seven years.

A diverse coalition of aviation and labour organisations have joined in opposing proposals in the Biden administration's fiscal year 2025 budget and regulatory changes that single out business aviation.

Following a troubling State of the Union reference to general aviation, President Biden unveiled an FY25 budget plan that includes a five-fold fuel tax increase on business aviation, as well as changes to the depreciation schedule for a purchased business aircraft from five to seven years.

The group's letter was signed by leaders of the Aircraft Owners and Pilots Association, Experimental Aircraft Association, General Aviation Manufacturers Association, International Association of Machinists and Aerospace Workers, National Air Transportation Association, National Business Aviation Association, NetJets Association of Shared Aircraft Pilots and Vertical Aviation International.

"According to a 2018 Harris Poll, 85 per cent of companies relying on an aircraft to meet their transportation challenges are small and mid-size enterprises," the group writes. "The passengers aboard a business aircraft are typically technicians, mid-level managers and customers, not C-suite executives."

Those companies use business aviation to optimise efficiency, productivity and flexibility, the letter continues. Additionally, further levies would harm communities that depend on business aviation for essential lift and to support law enforcement, medevac and humanitarian operations utilising business aircraft.

Negative tax proposals would also adversely impact an industry that supports 1.2 million jobs and contributes nearly $250 billion to the country's gross domestic product. The coalition further warned of their impact to the industry's continued role as ‘an innovation incubator’, driving the aviation industry's advancement toward greater safety, sustainability and net-zero carbon emissions.

"The health and livelihood of our industry is dependent on having an effective, reliable and conducive regulatory and business environment," the coalition continues. "Harmful tax proposals go in the wrong direction. Rather than ill-considered tax proposals and regulatory changes, we urge Congress to partner with the business aviation community, which is leading the way in developing new and innovative safety and environmental technologies, connecting communities, creating jobs and benefiting American businesses of all sizes."

There have also been individual statements from NATA, GAMA and NBAA leaders.

NATA president and CEO Curt Castagna says: "Business aviation is in the crosshairs again at a time when it is needed the most. The White House budget includes multiple provisions that mischaracterise the value of, and would adversely affect, the business and general aviation sectors, jeopardising the jobs they provide and disregarding the critical services they support

"During last week's State of the Union address, President Biden spoke passionately about our country's freedom, future possibilities, and jobs growth, all attributes fostered by our essential industry. Rather than singling out general aviation, the Administration's first priority should be creating and preserving an environment in which aviation continues to facilitate business growth and contributes to the national economy.

"NATA opposes such an increase in fuel taxes for these private, non-commercial operators. In addition, we are concerned that the Biden Administration is failing to account for the billions of business aviation tax dollars that are diverted from the Airport and Airways Trust Fund into the Highway Trust Fund. Such diversion weakens the national airspace system and could place the safety of the industry at risk.

"Unfortunately, the Biden Administration is proposing a tax increase it mistakenly believes will benefit the national aviation system. This is not the case. For nearly two decades now, Congress and the IRS have failed to address provisions in the tax code that allow for the HTF to erroneously keep billions of aviation tax dollars that were intended for the AATF.”

In 2016, the GAO released a report on the impact of diversions of non-commercial jet fuel tax revenues from the AATF to the HTF. The report concluded the diversion of funds stemming from a 2005 change in tax law resulted in a loss to the aviation fund of between one and two billion dollars intended for airport improvements and system modernisation. The diversion has continued since the 2016 report, costing the Airport and Airways Trust Fund billions of dollars.

"Should the Biden Administration seek to have a meaningful increase in funding to the AATF, fixing the multi-billion dollar diversion to the HTF is where we suggest they begin," he concludes.

GAMA president and CEO Pete Bunce, says: "The general and business aviation industry has supported the Biden-Harris Administration in strengthening safety, furthering workforce investments and enhancing sustainability of the sector. We are pleased to see that the President's budget prioritises investment in the FAA to improve certification and oversight, and address air traffic workforce and facilities and equipment issues. It is, however, disheartening to see that short-sighted political proposals are now being put forth that can set back our industry with consequences that harm our indispensable workforce, the very same men and women in the United States manufacturing sector that the Administration claims to emphatically support.

"The political soundbites of closing the so-called corporate jet loophole and drastically increasing the jet fuel tax by nearly five times, does nothing more than harm demand for aircraft that are called 'business jets' or 'corporate jets' for a specific reason. These vehicles facilitate efficient mobility for businesses to create jobs throughout our nation, particularly in communities underserved by commercial service. Why would the Administration want to hurt workers who make these aircraft or those communities that benefit from the jobs and/or mobility these vehicles enable?

"The general and business aviation industry has also been an innovation incubator for the entire aviation sector whether through implementing safety or efficiency improvements or being first adopters in the use of sustainable aviation fuel. The health and livelihood of our industry is dependent on having an effective, reliable and conducive regulatory and business environment. These tax proposals go in the wrong direction.

"While the President's budget is an outline of the Administration's priorities, we encourage Congress to have a more constructive approach as it works to set and pass the budget for the federal government in the coming fiscal year. In the meantime, GAMA will continue its staunch advocacy of our world-class manufacturers and workforce, demonstrating the utility and importance of the industry and its great manufacturing jobs before the Administration and Congress."

NBAA president and CEO Ed Bolen says: "The Biden administration's sweeping plan would hurt business aviation and the jobs and communities that depend on it, and make it harder for US companies to compete in a global economy. Among the proposals that single out business aviation for onerous treatment is a five-fold fuel tax increase, even though current fuel taxes already cover the incremental cost imposed on the aviation system. We urge Congress to tell the president that his gambit won't fly with the citizens, companies and communities that rely on business aviation."

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