Tax Controversy
NetJets has been involved in a tax dispute with the IRS. Commercial airlines are charged tax per passenger ticket to pay for various Federal Aviation Administration activities. Private aviation is not charged the same tax. The IRS has argued that the NetJets fractional ownership model is really disguised commercial aviation in some cases, and has assessed NetJets with unpaid taxes and penalties exceeding $366 million. NetJets has sued the IRS over this assessment and previously paid taxes and penalties exceeding $643 million. The recent FAA re-authorization bill contains a provision that would (temporarily) address the issue by changing the law to support NetJets and other fractional ownership airlines, after what was reported to be a $2.5 million lobbying effort by NetJets, the largest fractional jet ownership airline by market share.
Read more about this topic: Net Jets
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