Tag: aviation

Enter The Drones – FAA required to make room for UAVs by 2015

Ari Good aviation tax lawyer drones
Lousy legroom too

Enter The Drones – fSo from the looks of it it’s not so much a question of if, but rather when, private and commercial pilots will be sharing the American skies with unmanned aerial vehicles (UAVs), more commonly known as drones.  The FAA has at least as early as 1991 been collecting information and requests from industry and Congress alike regarding implementing these systems. The FAA Modernization and Reform Act of 2012 requires that the FAA implement the necessary procedures to put drones to share our skies by 2015, although it looks like they’re running into little delays here and there (perhaps not so strange for a government agency).

So, drones, are they a good thing or a bad thing?  Well, I say both.  The possible civilian uses are exciting.  I was listening to people sound off on the issue in a Google hangout (a little virtual town meeting on pretty much anything).  One person who influenced me the most was a fire chief talking about its department’s use of a drone to pinpoint hotspots in a dangerous wildfire.  He said that he would not have been able to get the fire under control nearly as effectively without it, since the area was too dangerous for helicopters and too distant for conventional aircraft.  Industries of all stripes lined up with their favorite uses, ranging anywhere from monitoring oil pipelines to crops to real estate professionals who want the coolest video ever for the neighborhood they’re showing.  The technology is impressive (and undoubtedly has multiple commercial uses).  So, there is no doubt there are some serious potential benefits and a fun, technological “gee whiz” factor.

Now the part that concerns me a bit.  Among the biggest proponents, and biggest customers, for drones are federal and state law enforcement agencies, many of whom already have them, even smaller bodies like my own hometown Collier County Sheriff’s Department.  Now I am a law and order guy but in a Constitutional democracy we have the obligation to ask, and the right to know, the types of policing operations would require mass, continuous and detailed surveillance?  There is no doubt that certain operations would benefit tremendously from this type of technology, and having drones in high-stakes scenarios could save officers’ lives.  The problem is that these machines are not like manned aircraft.  They don’t get tired, they can see almost anything, and they can watch over people 24/7, whether we like it or not.  We need to be honest with ourselves about human nature: isn’t a drone is just too cool a toy to sit underneath the government tree?  I vaguely recall a case from law school in which the court threw out evidence collected from a marijuana grow house because the police used electronic surveillance equipment to “look” through the grow house walls without a warrant.  So, maybe the drones will be looking for terrorists, maybe for pot, but what about a politically unpopular land-use or political gathering?  Food for thought.

In any case drones are already a reality in our US skies.  It is essential that the FAA continue to develop the appropriate regulatory and operational framework with the Constitution in mind.  From a technological standpoint, too, we also need to make dern sure we don’t have Predators smashing into cargo ships full of Spongebob Squarepants paraphernalia or shooting down 172s.  It sounds funny but computers can and do make mistakes, and these would be big mistakes.  There must be some sort of civilian oversight of law enforcement use of the drones, and, in my view, military missions are probably prohibited under the Constitution.  Given that there are some years of implementation to come it’s worth having a look at the issue and the current debate.

The Jet Market: By The Numbers

The following September data comes from Chase Equipment Finance:

September Overview:
o Approaching crunch time for 2012 delivery outlook
• Order activity for the remainder of the year, particularly Q4, will be critical for determining whether next year’s deliveries will meet estimates
• Analysts forecast a 20% increase off the bottom in 2012, but this will require a pickup in demand that has been slow in coming and confined to the larger segment of the market
o Used market trends flipped in August
• Last month saw higher prices and higher inventories, the opposite of what has been observed for most of the year
• The increase in prices is a positive sign and the bump up of used inventories may be a reflection of broader economic weakness, but one data point is not enough to determine that the trends are changing
o Used jet inventories increased by 20 bps
• Inventories for sale as a percentage of the active fleet increased to 10.5% in August
• By category, Heavy (+0.3%), Medium (+0.1%) and Light (+0.2%) jet inventories were all up from the prior month
o Average asking price increased 0.2%
• Average price rose to $10.64MM in August, and is down 6.4% y/y
• Heavy jet prices decreased 0.3%, while Medium and Light jet prices increased 1.1% and 1.6%, respectively

NBAA’s Handy State Tax Guide

The National Business Avaition Association publishes a very handy “quick reference” tool to state laws concerning aircraft sales and use tax, aircraft registration, fuel tax and related tax issues. This service is free to NBAA members with usernames and passwords to www.nbaa.org. This service resembles, though certainly doesn’t replace, a similar compilation available through publisher Conklin & DeDecker.

Whatever resource you use, however, must be current as to recent tax law changes. Florida only recently, for example, created new provisions governing sales and use tax applied to aircraft returned here within 180 days of purchase. Contact a qualified aircraft tax advisor for details and the most recent updates. Also visit our website, at https://www.goodattorneysatlaw.com/aviation.html.

Substantiating Aircraft Business Use

On audit an examiner will consider the degree to which you have documented your business use. This will include not only your flight logs but receipts, meeting records, and other evidence of the business purpose for the plane. Duration also plays a part, especially for “mixed purpose” trips to pleasant destinations. The “predominant” purpose for a trip must be for business, that is, at least the majority of the majority of the days must have been spent on business activities, documented as such. For example, your trip to Telluride might have both business and personal pleasure aspects (it should). Just be sure that you can articulate the business aspects of this trip.