Getting a cheap ticket somewhere is as welcome a surprise as anything. There are whole forums devoted to award travel, entire companies and platforms searching for cheap flights, and shoestring travelers looking for the biggest bang for their buck. Whatever the price of the ticket, there\u2019s one thing that\u2019s for sure: taxes. Every time a traveler buys a plane ticket, 7.5% of the fare goes to the federal government. But those rich enough to zip through the skies in private jets aren\u2019t subject to the same ticket tax.\u00a0<\/p>\n
\n
That difference is one piece of what the Institute for Policy Studies called a \u201ctaxpayer subsidy\u201d for private aviation in a September report. Noncommercial private jets account for about 7% of flights handled by the Federal Aviation Administration, but contribute just 0.6% of the taxes flowing into the fund that helps finance it, according to the Department of Transportation.<\/p>\n
The private-jet class benefiting from this arrangement\u2014which IPS estimates is 256,000 people, or just 0.003% of the global population\u2014holds $31 trillion in wealth. IPS said they benefit in three ways: tax breaks on qualifying aircraft purchases, publicly-funded airport infrastructure, and an aviation-tax system in which private jets contribute far less than commercial travelers relative to their share of flights.<\/p>\n
\u201cThose are the menu of ways in which we all chip in for private jet travel,\u201d Chuck Collins, coauthor of the report and director of the Program on Inequality and the Common Good at IPS, told Fortune<\/em>. \u201cWe all subsidize this tiny segment of the ultra rich and their transportation.\u201d<\/p>\nPrivate jets worth tens of millions bring in millions in tax breaks<\/strong><\/h2>\nBusiness is booming for private jets, with global sales reaching $40.3 billion in 2025, up nearly 24% over five years and growing at an annual rate of 4.7%, according to IPS. That increase in ownership, despite the pandemic, inflation, and high oil prices, is partly spurred by tax advantages.<\/p>\n
Last year, President Donald Trump\u2019s One Big Beautiful Bill Act restored 100% bonus depreciation for qualifying business assets, including private aircraft, which means an eligible buyer can deduct the full cost of a jet in the year it is put into service instead of spreading that deduction over several years.\u00a0<\/p>\n
Justin Crabbe, CEO of private jet marketplace Jettly, told Fortune <\/em>he now sees companies buy $75 million private jets to \u201cwash a lot of tax obligations off of their plate just by way of that purchase\u201d instead of needing to fly them.\u00a0<\/p>\n\u201cWe get a lot of people and inquiries [from] people that don\u2019t even need the aircraft,\u201d Crabbe said, explaining that buyers can then put the private jet into charter service so it earns revenue and can support the case for business-related use.\u00a0<\/p>\n
The IPS report illustrates the tax benefits with the example of a $40 million jet. IPS estimates the first-year deduction could reduce a buyer\u2019s federal tax liability by as much as $14.8 million at a 37% rate, depending on the buyer\u2019s taxable income, business use and other tax circumstances. However, IPS couldn\u2019t calculate how much total federal tax revenue is foregone as a result of this tax provision.<\/p>\n
But depreciation isn\u2019t the only tax advantage. IPS said eight states\u2014including Alaska, Oregon, and New Hampshire, which don\u2019t have a general sales tax, and New York and Massachusetts, which do\u2014have full or near-total sales tax exemptions on private jet purchases. In Massachusetts, where consumers pay a 6.25% sales tax on transport like cars and bicycles, the aircraft exemption will cost the state $25.3 million this year, according to an estimate from the Massachusetts Budget and Policy Center. Some Massachusetts lawmakers are trying to repeal the exemption with a bill introduced by Sen. Michael J. Barrett last year, but the Legislature\u2019s revenue committee is reviewing it.<\/p>\n
\u201cThe bicycle buyers of America are not a powerful lobby, so you have to pay sales tax, and you don\u2019t get to depreciate your bicycle in one year,\u201d Collins said.\u00a0<\/p>\n
The private jet lobby<\/strong><\/h2>\nPrivate aviation\u2019s tax breaks have strong defenders. The National Business Aviation Association and other aviation groups argue tax breaks help support jobs while spending millions lobbying to preserve their favorable treatment. The NBAA, which represents 10,000 private aviation company and professional members spent a combined $3.4 million lobbying in 2024 and 2025, coinciding with the Big Beautiful Bill\u2019s restoration of the 100% bonus depreciation for private jets, according to the IPS report.\u00a0<\/p>\n
The report also credits the trade group for fighting state taxes on private jet purchases. In Washington, NBAA opposed a 10% luxury tax on aircraft worth more than $500,000 that passed in May 2025 and urged private jet operators to \u201cmake their voices heard.\u201d A bill repealing the tax then became law before the tax itself went into effect.\u00a0<\/p>\n
NBAA also opposed Massachusetts\u2019 prior attempts to impose a luxury tax on aircraft purchases. During a 2021 fight, the group warned lawmakers that imposing its 6.25% sales tax on aircraft would put the state at a \u201ccompetitive disadvantage\u201d with its neighbors,\u00a0 forcing general aviation to move to other states and making Massachusetts lose its status as \u201ca favorable location to base aircraft.\u201d<\/p>\n
There\u2019s even currently a House version of a pending air-safety bill, the ALERT Act, which includes a provision that would block state and local officials from using aircraft-tracking data to identify and tax private jets, while the Senate version strips it out\u2014with lawmakers racing to pass the bill before the midterms.\u00a0<\/p>\n
Taxpayers support private jets\u2019 infrastructure\u00a0<\/strong><\/h2>\nPrivate jet owners also benefit from taxpayer-funded airports and air traffic infrastructure.<\/p>\n
The IPS report found that of the nearly $7.6 billion in federal Airport Infrastructure Grants awarded through August, about $1.3 billion went to smaller airports (with little or no scheduled passenger service) that mostly serve private jets and other general aviation. The report flagged over $1.1 billion in grants for projects with a \u201cstrong likelihood\u201d of benefiting private jets, including hangars and runway improvements.<\/p>\n
\u201cPrivate jets don\u2019t chip in their fair share of the use of the airspace,\u201d Collins said.\u00a0<\/p>\n
Commercial passengers help fund that system through taxes on their tickets. Private jet owners do pay other taxes and fees, including fuel taxes and landing charges, but Crabbe noted private jets still use the same infrastructure.\u00a0\u00a0<\/p>\n
\u201cThe controller has to work for the same aircraft that\u2019s flying in with 400 people on board [as] it does an aircraft with nobody on board,\u201d Crabbe said, estimating about half of private flights involve an empty plane. \u201cThe taxpayers are paying for these planes to be supported while they\u2019re flying empty more often than not.\u201d<\/p>\n<\/div>\n
#Americas #billion #private #jet #boom #Taxpayers #billionaires #foot #bill<\/p>\n","protected":false},"excerpt":{"rendered":"
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