* IRS accused of mistakenly assessing "ticket tax"
* NetJets says services do not trigger tax
* IRS spokeswoman declines to comment
Nov 17 NetJets Inc, a private jet-sharing
company owned by Warren Buffett's Berkshire Hathaway Inc , sued the United States to recoup $642.7
million in taxes and penalties it said were assessed
The lawsuit filed Monday by four NetJets units contended
that the Internal Revenue Service mistakenly assessed a "ticket
tax" meant to apply only to passengers who buy seats on
commercial or charter aircrafts.
As a manager of private aircraft, NetJets said its services
do not qualify as "taxable transportation," under Congress'
definition of the tax, imposed in 1954. Rather, NetJets said it
acts as an "agent" to owners of the planes.
NetJets also said rivals have not faced similar taxes,
putting it at a competitive disadvantage, and that it did not
have clear guidance on how to collect the tax from passengers.
Because of the IRS' mistaken interpretation of the law, the
NetJets units have been "stuck with a $642 million-plus bill
for past taxes the IRS never indicated they were required to
collect and for which they are not even the actual taxpayers,"
the complaint said.
The lawsuit seeks a refund of the $642.7 million, plus
penalties and interest. It was filed in a federal court in
Columbus, Ohio, where NetJets is based. Berkshire is based in
An IRS spokeswoman declined to comment. NetJets and a
lawyer for the company were not immediately available for
comment. The parent company, NetJets Inc, was not among the
In recent years, NetJets enjoyed a turnaround after prior
management had racked up $1.9 billion of debt and overseen
frequent quarterly losses. It is now profitable.
The case is NetJets Large Aircraft Inc. v. U.S., U.S.
District Court, Southern District of Ohio, No. 11-1023.