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Giving politicians a lift? Play by the rules
As the presidential primary season heats up and Election Day approaches, you may be asked to make your aircraft available for travel by government officials and political candidates. Before doing so, you should familiarize yourself with the many laws, regulations and rules that govern such transportation.
The Federal Election Act of 1971 prohibits a corporation from providing free or discounted transportation to federal candidates or anyone traveling in connection with their campaigns. That includes their aides and members of the news media. In addition, both houses of Congress and the executive branch of the federal government place strict limits on the receipt of gifts. Providing free or discounted aircraft transportation is considered the equivalent of giving a gift.
The Election Act establishes rules for reimbursement for transportation of elected officials, candidates and their entourages. When it is between cities with regularly scheduled first-class airline service, the traveler must pay an amount equal to the lowest unrestricted, nondiscounted first-class airfare. For flights between cities without regular first-class service but with coach service, the traveler must reimburse an amount equal to the lowest unrestricted, nondiscounted coach airfare. Where there is no regularly scheduled airline service, the traveler must reimburse at a rate equal to the usual charter fare for comparable aircraft. In any event, payment must be made within seven days after the flight.
Different rules apply to travel on helicopters. Payment for such travel must be made within 30 days after receipt of an invoice and not more than 60 days after the flight. The reimbursement amount must equal the normal fare or rental rate for a comparable helicopter.
If you provide transportation on an aircraft that is on a charter certificate, the campaign traveler must pay the normal charge for the service. This is the rule even if you conduct the flight under Federal Aviation Regulations Part 91. Any difference between the normal market rate and the rate charged would be considered a campaign contribution.
The recently enacted Honest Leadership and Open Government Act of 2007 governs use of private aircraft by members of and candidates for the House and Senate. Senators and senatorial candidates may travel on private aircraft but must reimburse the aircraft owner for the flight at the fair-market charter rate. Reimbursement at that rate is required regardless of whether the flight is conducted as a private operation under Federal Aviation Regulations Part 91 or as a charter flight under Part 135. The rules for House members and candidates are even stricter: they can't accept any travel on private aircraft unless it is conducted pursuant to a charter certificate and reimbursement is made at the fair market charter rate.
A Key Exception
As you may know, Part 91 airplane owners and operators face limitations whenever they attempt to be reimbursed for providing transportation on their aircraft. Generally speaking, if you're a Part 91 operator, you're prohibited from accepting reimbursement for such travel unless you can qualify it under one of the limited exceptions in Part 91.501. Fortunately, Part 91.321 provides an exception for campaign travel and allows for payment of the amounts required under the Election Act. Thus, an owner or operator of a Part 91 aircraft can receive payment from a federal candidate to the extent established by the Election Act and still operate under Part 91. The exception in Part 91.321 has been expanded to apply to candidates in state elections.
The IRS considers campaign flights to be "commercial" travel for purposes of the federal excise-tax rules. The usual 7.5-percent commercial transportation tax, along with segment fees, must be collected and paid on all transportation provided to campaign travelers.
As you can see, many limitations apply to the transportation of candidates on business aircraft, and some of the rules have recently changed. So before you say yes to your favorite candidate's request for a ride, you'd be smart to talk with a tax adviser, attorney or accountant who understands all the regulations and restrictions.