Treasury refuses to close private jet tax loophole senators call a giveaway to billionaires

The Treasury Department has told five Senate Democrats it will not close a tax loophole that lets people who fly on their employer’s private jet for personal trips report only a small fraction of the flight’s actual cost as taxable income.

The loophole centers on the Standard Industry Fare Level, or SIFL, a formula the Internal Revenue Service uses under Treasury Regulation Section 1.61-21(g) as a safe harbor for valuing the personal use of company aircraft, rather than requiring taxpayers to calculate the flight’s actual charter-market cost. SIFL rates, which the Department of Transportation updates twice a year, run between 18 cents and 25 cents per mile, far below the $8 to $23 per mile that chartering a comparable jet can cost. For a flight between New York’s John F. Kennedy International Airport and Ronald Reagan Washington National Airport, the senators said the fair market value can run from $4,500 to $5,112, but the SIFL method values the same flight at $235.77, a gap that can save a flier $1,577 to $1,804 in taxes on one trip.

Sens. Sheldon Whitehouse of Rhode Island, Elizabeth Warren of Massachusetts, Chris Van Hollen of Maryland, Ed Markey of Massachusetts and Bernie Sanders of Vermont, an independent who caucuses with Democrats, sent Treasury a July 24 letter asking the department to update the SIFL formula so it reflects real flight costs rather than decades-old fare assumptions. Treasury responded on September 3, saying that calculating true market value for each flight would be administratively burdensome for taxpayers and for the IRS.

“President Trump’s 2017 tax law and Big, Beautiful-for-Billionaires bill handed billionaires and big corporations massive tax breaks on private jets,” Whitehouse said. “The Trump administration now says it would be ‘burdensome’ to close the private jet tax loophole because this is an administration hell-bent on using the powers of government to make the ultra-rich even richer, and they don’t care if middle-class taxpayers get stuck with the tab.”

Van Hollen said the administration’s priorities “revolve around enriching himself and his billionaire friends,” adding: “While working families struggle to afford groceries, housing, and gas, this administration focuses on tax breaks for billionaires, including tax breaks for private jets. What a disgrace.”

The senators’ letter followed a separate congressional inquiry into bonus depreciation rules for private aircraft, a different tax provision that lets buyers write off the full purchase cost of a new jet in the year they buy it. The Internal Revenue Service separately opened a corporate aircraft audit initiative in 2024 to examine whether companies were properly separating personal from business flight use, but that initiative did not change how the SIFL formula itself values personal flights.

The 2017 tax law Whitehouse referenced also let buyers of new private jets immediately deduct the aircraft’s full purchase price through 100 percent bonus depreciation, a separate tax break that lowers the up-front cost of owning a jet before the SIFL formula ever applies to a personal flight aboard it.

Treasury’s September 3 letter did not include a timeline for revisiting the formula.