Aircraft Terminal Charge and SIFL Mileage Rates Issued for Second Half of 2013

Author: Rena Pirsos, XpertHR Legal Editor

September 12, 2013

The US Department of Transportation has released the terminal charge and standard industry fare level (SIFL) mileage rates for the second half of 2013. Attachment B, August 2013. These rates are revised semiannually and are used by the Internal Revenue Service to determine the value of noncommercial flights on employer-provided aircraft under the aircraft valuation method for withholding tax purposes. Slight changes have been made to the terminal charge and the SIFL rate for the first 500 miles.

For July 1, 2013 through December 31, 2013, the rates are as follows:

• The terminal charge is $48.53 (was $48.54 for the first half of 2013).
• The SIFL rates are:
  • $0.2654 per mile for the first 500 miles (was $0.2655 for the first half of 2013);
  • $0.2024 per mile for miles 501 to 1,500; and
  • $0.1946 per mile for miles over 1,500.

Under the Internal Revenue Code, the value of an employee's business use of employer-provided noncommercial aircraft is a tax-free working condition fringe benefit, but the value of any personal use is subject to federal income and employment tax (Social Security and Medicare tax) withholding and to federal unemployment tax. If an employee combines a business trip with a personal trip, the employer must withhold on the value of the personal portion of the trip.

Depending on the circumstances of the trip, employers may either use a general valuation method or the special aircraft valuation method, under which a flight's value is determined using the SIFL formula. Employers multiply the SIFL cents-per-mile rate for the period of the flight by an aircraft multiple and then add the terminal charge. The aircraft multiple is based on an aircraft's maximum certified take-off weight and differs depending on whether the employee is a control employee.