The U.S. Department of Transportation recently revised the SIFL rates that are used to value an employee’s personal use of a company aircraft, as required by the Internal Revenue Code Section 61 and the Federal Tax Regulations Section 1.61-21(g). The Department announced that the following rates will apply for the 6-month period January 1, 2017 through June 30, 2017:

Mileage Range Amount per Mile
0 – 500 miles $0.2125
501 – 1,500 miles $0.1620
Over 1,500 miles $0.1558
Terminal Charge $38.85

What This Means to You

If your company permits employees to use a company owned aircraft for personal use, it is important to take note of the new rates and be prepared to calculate the value of the employee’s use as a potentially taxable event to the employee. The rules also apply when an employee’s guests or family members use an employer-provided aircraft. Additionally, even though the company may lose the business deduction for personal use flights that the IRS classifies as recreational, amusement or entertainment, such classification does not eliminate the requirement that the company allocate the value of the personal use flights to the individual receiving the benefit of such flights.