The Internal Revenue Service (IRS) announced inflation adjustments to the federal excise tax (FET) rates on air transportation for 2012. The new FET rates will apply to aircraft operators that have flights subject to the FET (such as Time Share Agreements). The new rates will take effect as of Jan. 1, 2012, and are valid for air transportation taken through Jan. 31, 2012. The Surface and Air Transportation Programs Extension Act of 2011 only extends the FET rates through Jan. 31, 2012. The FET rates will apply on amounts paid on or before Jan. 31, 2012 for transportation taken after that date. Additional information is available at NBAA.org.

The adjusted rates for 2012 are:

Percentage Tax - 7.5%
Domestic Segment Fee - $3.80
International Arrival/Departure Head Tax - $16.70
Hawaii/Alaska Flight Tax - $8.40

We anticipate that Congress will extend the FAA authorization beyond Jan. 31, 2012 and avoid another shutdown of the FAA.