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DOT Issues Favorable Opinion on Skydiving Taxes

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(updated 01/10/14)
Following a two-year effort by USPA, the U.S. Department of Transportation formally responded to a USPA question regarding the efforts of states to tax revenues from skydiving. On December 30, 2013, USPA received an opinion letter from the Office of the DOT General Counsel asserting that the federal Anti-Head Tax Act (AHTA) preempts any state efforts to tax gross receipts on skydiving operations. The AHTA, passed by Congress in 1973, prohibits states or political subdivisions from “… collecting a tax, fee, or other charge … on the gross receipts from … air commerce …” The DOT letter says, “Aircraft operations carrying skydivers fall under the definition of air commerce …” and makes clear that states cannot tax the gross receipts from the retail sales of skydiving operations, no matter whether the state calls it an amusement tax, an entertainment tax or a tax by any other name. The DOT letter even rebuts one state’s assertion that it was taxing the skydiver’s freefall, not the airplane ride to altitude. The DOT notes that states are permitted to collect taxes on revenues derived from the sale of ancillary goods or services, such as DVDs or T-shirts.

In early 2012, with a growing number of skydiving businesses being audited by states, USPA recruited a legal team to research and draft a March 2012 USPA Memorandum that was provided to all Group Member DZs to use to inform their state departments of revenue that federal law preempts any state taxation of skydiving. However, many state officials dismissed the USPA memo as simply the opinion of a skydiving association. Now the U.S. DOT has issued an official federal opinion, which states cannot ignore. “This is a shining example of how USPA efforts on behalf of DZs also benefit individual skydivers,” said Executive Director Ed Scott. “Proliferation of state taxes on skydiving would surely drive up the cost of skydiving.”
I Jumped with the guys who invented Skydiving.

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I just joined USPA recently and am very thankful for them to be there to help the skydiving community. I also was surprised of all the benefits my membership gets me. I am sure like any other association they have their problems, but this is just another instance of where they do some good.

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http://www.uspa.org/Portals/0/Downloads/2013DOTOpinion.pdf

This is a very big win for skydiving. Besides states that want to tax free fall, there are cities/counties/airport sponsors that want to deem skydiving "commercial entertainment", thus imposing a per jump tax.

The battle to keep jump tickets low and jump planes flying at an airport near you never ends.

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