Bank of America last month formed the Corporate Aircraft Finance Division, a group that combines The Private Bank’s Aviation Finance Division with the Bank of America Leasing Corporate Aircraft Finance strategic business unit. With creation of the new division, Bank of America has more than 700 clients and $4 billion in aircraft loans and leases.
In keeping with NBAA’s new effort to seek candidates who are familiar with business aviation through a “variety of professional skills and experiences,” three of the association’s four new board members are not directly from corporate flight departments. The new members are Thomas Frist, pilot and co-founder of Hospital Corporation of America. Dr. Frist is also the brother of Senate majority leader William Frist (R-Tenn.).
The 2004 American Jobs Creation Act could have entirely the opposite effect on business aviation due to an “overreaching” IRS interpretation that’s causing many companies to reconsider their corporate aircraft use.
If the provision is accepted by the House and the bill signed by the President, all aviation fuel will be taxed at the same rate as highway diesel fuel–24.4 cents per gallon. The purchaser would then have to submit a claim to the Internal Revenue Service to receive the difference between the 24.4 cents paid and the 21.8 cents per gallon actually owed.
The object of the regulation is to set minimum insurance requirements for air carriers and aircraft operators regarding coverage for passengers, baggage, cargo and third parties. The rule applies to all operators flying into, out of, within or over the territory of a member state. The new insurance levels are tied directly to the mtow of the aircraft and a special drawing right (SDR).
CIT Group has sold most of its corporate aircraft financial business to GE Commercial Finance. The transaction includes approximately $700 million in loans and $200 million in leases on 380 business jets, turboprops and helicopters. CIT said it will continue to finance fractional aircraft shares and “select corporate aircraft.”
The UK’s Department for Transport (DfT) is considering whether to prevent foreign-registered aircraft that are not operated commercially from being based permanently in Britain. It is about to launch a consultation process on proposals to revise legislation on foreign-registered aircraft.
Although the FAA is not yet advocating new taxes or user fees, the agency continues to emphasize that it needs a consistent, stable revenue stream that is not tied to the price of an airline ticket.
The Isle of Man, a UK Crown Dependency in the Irish Sea, hopes to have its own aircraft register established by the end of next year. The island will operate the new register in parallel with the UK’s “G” register and market it as an additional benefit to individuals and companies seeking to benefit from the island’s fiscal and legal jurisdiction.
Conklin & de Decker part owner Nel Sanders-Stubbs, for years the NBAA’s prime source of tax knowledge and expertise, gave Conklin & de Decker aircraft acquisition planning seminar attendees some insights on what to expect in the way of federal passenger excise taxes as well as state sales, use and registration levies.