The U.S. Department of Transportation has released the Standard Industry Fare Level (SIFL) rates for the six-month period from July 1, 2006, to December 31, 2006. These rates are needed in order to apply the IRS’s aircraft valuation formula to compute the value of non-business transportation aboard employer-provided aircraft and impute the income of the employee as required by the Internal Revenue Service Rules Section 1.61-21(g). The SIFL rates for the six-month period from July 1, 2006, to December 31, 2006, are: 0500 miles $ 0.2071 ; 501-1,500 miles $ 0.1579; over 1,500 miles $ 0.1518; and Terminal Charge of $ 37.85.
If you are an employer and an employee or a non-employee guest or family member is flown on your aircraft, the flight is potentially taxable to the individual receiving the ride. The aircraft valuation formula applies on a per-flight, per-person basis and will be calculated using the distance in statute miles from where the individual boards the aircraft to where the individual deplanes. Additionally, imputation of the SIFL rate applies regardless of whether the employer was allowed to deduct the cost of the flight.