If an employee flies on an employer-provided aircraft for non-business purposes, the value of that transportation is potentially taxable to the employee. This is also true for the employee’s family members or a non-employee guest. The Standard Industry Fare Level (SIFL) rate is used to meet the Internal Revenue Service Rules Section 1.61-21(g) requirement that the value of the transportation is calculated and then taxed as a benefit to the employee or non-employee guest.
The SIFL rate is calculated based upon distance and rate per mile and is performed on a per-flight, per-person basis. A flight equals “the distance in statute miles from where the individual boards the aircraft to where the individual deplanes.” The revised rates for July 1, 2005 through December 31, 2005 are: 0–500 miles=$0.1926/mi.; 501–1,500 miles=$0.1468/mi.; over 1,500 miles =$0.1412/mi.; and a Terminal Charge of $35.21.
