FAA Approves COVID Vaccine for Pilots and NBAA Announces IRS Final Ruling Advocacy Win

FAA Approves COVID Vaccine for Pilots and NBAA Announces IRS Final Ruling Advocacy Win

FAA Issues Order Authorizing Pilots to Receive COVID-19 Vaccine

Following the Emergency Use Authorization from the U.S. Food and Drug Administration (FDA) for Pfizer, Inc.’s COVID-19 vaccine in mid-December, the Federal Aviation Administration (FAA) determined that pilots may receive the vaccine under the conditions of their FAA-issued airman medical certification. Without such an order, pilots receiving vaccines that have not received full FDA approval risk invalidating their medical certificate.

To maintain the highest level of safety, the agency will require a 48-hour waiting period to monitor side effects before flying, which is similar to what is enforced for vaccines for tuberculosis and typhoid. This waiting period is required after each distribution of those vaccines given in two doses, currently Pfizer and Moderna.

The FAA anticipates taking no additional measures to ensure safety after the initial 48-hour window but states the agency’s medical professionals will continuously monitor the initial distribution of the novel vaccine and documented clinical results and will adjust these recommendations as needed.

The order also states that the FAA will evaluate vaccines from other manufacturers as they receive FDA authorization in the coming weeks and months and will advise pilots of any waiting periods required for those vaccines.

NBAA Celebrates Successful Advocacy in IRS Final Ruling Affecting Aircraft Management Companies

The National Business Aviation Association (NBAA) announced it was successful in its advocacy efforts for business aviation during the passage of the Tax Cuts and Jobs Act (TCJA). The association led an industry regulatory effort to provide certainty and clarity for aircraft management companies and owners regarding their federal excise tax (FET) obligations.

In 2017, following a yearslong advocacy campaign led by NBAA, lawmakers introduced key tax reforms, such as 100% bonus depreciation for new and preowned property, including business aircraft. The TCJA also made clear the 7.5% FET on commercial air transportation is not due when owners conduct flights on their own aircraft with a management company’s assistance. The legislative provision explained that such flights are subject to the non-commercial fuel tax and exempt from the percentage tax ending significant uncertainty that had devastating impacts for aircraft management companies.

The NBAA and its Tax Committee championed industry efforts to work with the Department of the Treasury and IRS on regulations that correctly implement the TCJA management company provision. That effort has now resulted in a final rule from the IRS that represents the successful conclusion to prevent the improper and retroactive application of FET to management companies and aircraft owners.

In its final rule, the IRS adopted several significant changes suggested by NBAA to eliminate potential confusion and provide clear standards for taxpayers and the government. For example, the rule affirms that owner trust arrangements, used to register thousands of business aircraft for regulatory compliance purposes, are eligible for the FET exemption. Also, the final regulations abandon a proposal to expand the definition of leases disqualified from the FET exemption, which would have severely limited the exemption’s application to many common aircraft ownership structures.

The final rule also eliminates a complicated allocation method that would have been required when owners take flights on a substitute aircraft. Instead, only the fair market value of those specific charter flights involving substitute aircraft will generally be subject to FET. It also clarifies that aircraft owners qualify for the FET exemption regardless of whether they conduct flights on their own aircraft under Part 91 or Part 135 of the Federal Aviation Regulations.

The final rule has yet to be released as of this writing.

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