The Wall Street Journal
A scene in National
Geographic’s “Alaska Wing Men” television series shows pilot Jack Barber
weaving his small charter airplane in and out of white plumes that hide
the Merrill Pass’s jagged cliff line. A narrator explains that ice
forming at such a high altitude threatened to pull Barber’s plane,
loaded with bear-hunting passengers, to the ground.
The
13-episode show has filmed slippery glacier landings and merciless
weather, but Barber and federal lawmakers say the state’s charter
airplane industry of roughly 230 operators is also facing serious
headwinds from a tax dispute with the Internal Revenue Service.
A
fight over $1 million in unpaid taxes has already caused Barber to put
his Anchorage-based company, Alaska Air Taxi LLC, and its fleet of seven
small airplanes into Chapter 11 bankruptcy protection.
Alaska
Democratic Sen. Mark Begich is accusing the IRS of trying to collect
years’ worth of back payments from charter operators for a tax that he
says is vaguely defined and shouldn’t be charged at all on certain
flights. His office said that tax bills of up to $1 million have been
sent to the state’s charter airline operators, which carry tourists to
remote spots, support the oil-and-gas industry and deliver cargo to
hard-to-reach villages in a state where 82% of communities are not
accessible by road, according to the Alaska Air Carriers Association.
“This
thing is going to affect all the tourism in Alaska, if not the United
States,” Barber said of the IRS’s interpretation of the rules.
An IRS spokeswoman said she couldn’t comment on pending legislation or individual disputes.
The
federal government charges flight operators a $3-per-passenger tax for
trips that are flown at regular, scheduled intervals. Specifically, that
tax is due on routes that are flown “with some degree of regularity,”
according to the federal rulebooks.
The segment tax, as it’s
called, is also chargeable every time the airplane touches down and
takes off again during the same trip.
But the rulebooks don’t
define “some degree of regularity,” and the IRS has been stricter about
designating routes that some charter operators take as “regular,”
according to the Alaska Air Carriers Association.
“This is a
perfect example of the kind of confusing, nonsensical behavior from the
federal government that drives ordinary people crazy,” Begich’s office
said in a statement. “It doesn’t make sense, and it needs to be fixed.”
Begich
proposed a bill in July that would straighten out the rules. The bill
would change the wording so non-scheduled charter flights to areas that
aren’t reachable by paved roads won’t have to charge the tax.
The
bill would also get rid of the rule that makes operators charge the tax
multiple times on sightseeing flights. Those flights often make
“intermittent stops to view an attraction, as is common practice for
many Alaska flightseeing trips,” according to the office.
The
bill hasn’t had a hearing yet. (Alaska Rep. Don Young, a Republican, is
in charge of rallying support for the legislation in the U.S. House of
Representatives.)
The Alaska Air Carriers Association points out
that the charter airline industry makes up a large chunk of the state’s
commerce. The aviation business contributes $3.5 billion to the state’s
economy—8% of the state’s gross product—and employs 10% of the state’s
total workforce, according to the association.
Eighty-five percent of the state’s fleet of 10,947 aircraft are single-engine planes that charter operators often use.
Barber’s
15-person company flies passengers and cargo for big oil and mining
companies. He recently flew supplies to the under-construction Fire
Island wind turbine outside Anchorage.
Barber’s fight with tax
auditors began about six years ago when they determined that he should
have paid $240,000 in segment taxes over the years. His tab has grown to
about $1 million because of interest and penalties, he said.
Barber’s
trips appeared on the “Alaska Wing Men” series, which first aired on
the National Geographic Channel in January 2011. One of the clips was
scary enough to make us sweat a little, but Barber said the situation
was safer than it looked.
If the plane iced suddenly, he said that he could have dropped altitude to “get out of the ice.”
“It was kind of like scuba-diving where you could stand up and get a breath of fresh air,” Barber said.
http://blogs.wsj.com/bankruptcy/2012/10/23/lawmakers-say-irs-could-sink-alaskas-small-airlines/
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment