Business or personal use?
Tax law changes in 2004 changed how companies use their corporate fleet for personal or recreational use.
Before the laws changed, those on board a corporate jet for non-business reasons were charged the taxable portion of the flight’s cost, which typically equated to the amount of a first-class ticket on a commercial flight.
But for many reasons, including stockholder outrage over corporate abuse, that changed in 2004 when President Bush signed into law the American Jobs Creation Act of 2004.
Basically, the new law requires that people on board for non-business reasons pay their share of the true value of the flight, a complicated exercise that typically results in a much higher cost.
That doesn’t prohibit business owners from using their planes for non-business purposes. But with the higher costs, it does make them think twice about the higher price.
“Basically, when our planes are in the air, they’re in the air for specific business and with people who have business reasons to be aboard,” said Brent Fox, vice president of merchandising and purchasing for ABC Supply, which has two corporate jets at the Janesville airport.
“They’re rarely used for personal use, and if they are it’s because we’ve made the decision to take the hit on the higher cost.”
Last updated: 10:10 pm Thursday, December 13, 2012