![]()
On September 3, five U.S. senators — Sheldon Whitehouse, Elizabeth Warren, Chris Van Hollen, Ed Markey and Bernie Sanders — publicly challenged the Treasury Department over its decision to keep the Standard Industry Fare Level, or SIFL, the formula that sets the taxable value of personal flights on employer-provided aircraft.In their July 24 letter, the lawmakers argued that SIFL allows taxable values far below comparable charter prices. Treasury's August 17 response defended the formula, saying individual fair-market valuations would be "administratively burdensome" for taxpayers and the IRS.For owners, the immediate point is simpler: this exchange did not change the valuation rules. SIFL remains available under the IRS's existing guidance.How SIFL values a personal flightPersonal use of a company aircraft by an employee or the employee's guests is generally a taxable fringe benefit, according to IRS Publication 15-B.The IRS identifies two valuation methods: Fair Charter Value and SIFL. Fair Charter Value looks to the price of chartering a similar piloted aircraft from an unrelated party. SIFL uses a formula rather than a flight-specific charter price.The difference can be substantial. A Joint Committee on Taxation analysis compared a $235.77 SIFL value for a control employee's JFK-to-DCA flight aboard a light jet with charter estimates of $4,500 to $5,112.That illustration used first-half 2025 SIFL rates and broker quotes collected in January 2026 — not current SIFL rates. JCT also cautioned that SIFL is calculated per passenger, while charter prices generally cover the aircraft. Passenger count therefore matters to the comparison.The senators' release estimated $1,577 to $1,804 less in taxes for the executive in that example.Daniel Cheung, CPA, principal and co-founder of Aviation Tax Consultants, said SIFL can produce a taxable value below a flight's actual cost."SIFL is in fact still somewhat of a loophole — because SIFL valuation / income amount can be significantly below the actual costs of the flight," Cheung told GlobalAir.com.Operating costs and charter-market value are not the same measure. The IRS explains that an employer's cost of providing a benefit does not, by itself, determine its fair-market value.SIFL is not a mileage reimbursement rate.According to IRS Revenue Ruling 2026-8, the calculation applies the relevant mileage rates, multiplies that amount by the appropriate aircraft multiple and then adds a terminal charge. The Department of Transportation calculates the underlying rates, which are reviewed semiannually.The multiple depends on aircraft weight and whether the passenger is a control or non-control employee under the federal valuation rules.For January through June 2026, the IRS schedule specifies 29.80 cents per mile for the first 500 miles, 22.72 cents for miles 501 through 1,500 and 21.84 cents above 1,500 miles, plus a $54.48 terminal charge.For July through December 2026, NBAA's published schedule lists 32.25 cents, 24.59 cents and 23.64 cents for those mileage bands, respectively, with a $58.95 terminal charge. Each mileage band and the terminal charge rose about 8% from the first half.The flight date therefore determines which rate schedule applies.The disagreement concerns valuation, not whether personal flights can be taxable.The senators' position is that SIFL understates the benefit. Treasury's response emphasizes consistent results and avoiding individualized appraisals for every personal flight.Where reimbursement and depreciation fitCheung also pointed to Part 91 reimbursement restrictions as a practical reason companies use SIFL."SIFL becomes the default method of accounting for personal use," he said. "If the goal of the company is to maximize the amount an employee pays for their personal flights — SIFL is not the answer."That is not a blanket prohibition on reimbursement. FAA regulations allow certain arrangements, including qualifying time-sharing agreements, subject to limits. Operators must evaluate their particular arrangement rather than assume that reporting SIFL income authorizes a payment.The distinction is important: valuing a taxable benefit and collecting reimbursement are separate questions.The debate comes alongside permanent 100% bonus depreciation for qualifying business property.According to IRS guidance on the 2025 tax law, Public Law 119-21, commonly called the One Big Beautiful Bill Act, provides a permanent 100% additional first-year depreciation deduction for eligible property acquired after January 19, 2025.IRS Publication 946 confirms that certain aircraft acquired and placed in service after that date are eligible, subject to the applicable requirements.The provisions address different tax questions. Bonus depreciation concerns deductions for qualifying property. SIFL concerns the taxable value of personal transportation.Neither should be treated as automatic permission to deduct every aircraft expense. As NBAA explains, personal entertainment flights by specified individuals can trigger company deduction limits even when an employee reports taxable income.What operators need to knowOwners should keep applying the existing rules while separating three issues: employee income, company deductions and permitted reimbursement.Under the SIFL regulation, valuation depends on each passenger's flight and purpose, with consistency requirements governing use of the method. Flight departments should retain passenger names, dates, routes, business purposes and the details supporting each calculation.For depreciation, the IRS's business-use and recordkeeping requirements remain important. Reporting a personal flight under SIFL does not, by itself, establish that it qualifies as business use for depreciation.The senators' request and Treasury's response are not a new regulation. Owners should watch for formal Treasury or IRS action rather than treat the correspondence as an immediate compliance change. Eliminating treasury regulations would generally take either new legislation or an amended regulation, which normally involves a public comment period. Until then, the valuation framework remains in place, and the practical priority is making sure the records support how it is being used.