Private Pilot Reimbursement

[ronnieh]

It is my understanding it is DOC onjly. You can not figure in insurance, maintenance and so forth. If your employer is paying each individual travel allowance then I think you can use that money anyway you want to. But, it has to be legitimate shared expense. In other words each person must pay a proportional share including the owner/pilot and the trip must meet the common purpose clause. What did I forget Ron?

To my previous post to David, let me add the commercial license does not give you 135 privileges. It allows you to be compensated to fly someone else's plane.

 

[\__[Ô]__/]

To my previous post to David, let me add the commercial license does not give you 135 privileges. It allows you to be compensated to fly someone else's plane.

I am well aware that it doesn't provide pt 135 privileges. My scenario was (or was intended to be) the same as the private pilot scenario under discussion, except that the pilot now has a commercial rating. Essentially I'm asking whether having a commercial rating is sufficient to remove the limitation on having my company reimburse me when I'm flying myself and co-workers to a meeting (in a plane I provide).

I'm not looking to get paid to fly people there, I'm looking for to have the my company reimburse me for the flying expenses. We've already established a private pilot can't do this when there are passengers. My question is whether I can do that as a commercial pilot as a part 91 operation. Yes, I'm providing the plane, but so is the private pilot in this discussion. I'm not offering transportation to the public, I'm taking co-workers with me on a business trip we're going on anyway.

 

[ronnieh]

Dave, your commercial certificate is of no concern as far as the discussion Dr. Mack brought up. The problem with your scenario is the furnishing of the plane. Dr. Mack wants to widen the one exception that the FAA allows at this point. He wants to be able to carry passengers and still be able to accept money.

You having a commercial does not change the regulations. You would clearly fall under 135 doing what you want to do. If all it took was a commercial rating then Dr. Mack's law would be almost moot. He could just get a commercial license and carry the passengers in his plane. It will not pass the sniff test. If you want to accept money and fly passengers in your plane you will need a 135 certificate. It is just the way the FAR's are written.
BTW, you can take the co workers as long as you share the DOC. You just can't accept money from a third party.

 

[poadeleted20]

I should really know this, but i don't...
If I'm going to a business meeting with a couple co-workers and I fly them and myself in a plane I provide, can the company reimburse all of my costs if I have a commercial rating? This is private carriage (or non-common carriage?) and so a part 91 flight, right?

If you provide both the airplane and the pilot services, it's a Part 135 operation and you need a commercial operating certificate, not just a commercial pilot certificate. If they company provides the plane (say, by contacting an FBO and renting it in the company's name and paid by company check/purchase order/credit card), then any Commercial Pilot can fly it for the company. IOW, what you can't do is use your own airplane for such a deal where the company pays you for the use of your plane. The closest you can come with your own airplane is to be reimbursed by the other passengers for their share of the direct expenses while you eat your own share without reimbursement (see the Mangiamele letter discussed above) -- and that doesn't change even if you hold an ATP.

I presume I'd also need a 2nd class medical for this, as I'd be exercising my commercial pilot privileges.

Correct.

 

[poadeleted20]

Here are a couple questions regarding shared expenses. Is there a limit on the total that is shared?

Yes -- the total direct cost of the flight as defined in 61.113:

only fuel, oil, airport expenditures, or rental fees

Does the FAA care if the individuals turn these expenses in to their employer for reimbursement as they would for other methods of travel?

No. But per Mangiamele, you can't be reimbursed for your share.

Can the shared expenses be used to pay for the pilots owner aircraft.

Yes, but only for the direct expenses of the flight: fuel, oil, and airport expenditures (e.g., parking at the destination and landing fees at both ends)

 

[poadeleted20]

I am well aware that it doesn't provide pt 135 privileges. My scenario was (or was intended to be) the same as the private pilot scenario under discussion, except that the pilot now has a commercial rating. Essentially I'm asking whether having a commercial rating is sufficient to remove the limitation on having my company reimburse me when I'm flying myself and co-workers to a meeting (in a plane I provide).

Not in a plane you provide - that is a 135 situation. What having a Commercial Pilot certificate allows is for you to fly a plane the company provides with no money out of your pocket or the pockets of the other travelers, i.e., a corporate aircraft, even if just rented for the occasion in the company's name (not yours).

 

[ronnieh]

Thanks Ron, I thought I had close to right.

 

[\__[Ô]__/]

Ok, makes sense. I knew that usually providing the plane was sufficient to push it into 135 territory, but I didn't realize that it always did so. I thought as long as there wasn't a "holding out" of offering transportation services to the public (which I didn't think this was) that it was ok. Guess I was misinformed. Thanks for correcting me.

Sorry for the thread drift, but to summarize, if I've got this right:

Can do with private or higher certificate:
1) fly just yourself in any plane on business; get reimbursed by company for flying expenses as long as flying is incidental to business and you aren't carrying property for hire.
2) fly yourself and co-workers in any plane; get reimbursed by co-workers for all but your share for expenses (as defined in 61.113), provided you have a common purpose for the flight.

Can do with a commercial or higher certificate (and not needing operator certificate):
3) fly yourself and co-workers in company plane (owned or rented in their name); no need to pay any expenses; can get paid for flying the plane.

Requires 135 operator certificate and commercial pilot on that certificate:
4) fly yourself and co-workers in your plane, get reimbursed by the company for any flying expenses or get paid for pilot services.
5) fly yourself and co-workers in your plane, get reimbursed by co-workers such that you pay less than your share of the expenses.

Did I get anything wrong, or miss anything?

 

[poadeleted20]

I think that pretty well covers it, other than the typo of "61.133" instead of "61.113".

 

[tmyers]

So in order to utilize a commercial rating I would have to be renting an aircraft or flying one owned by a company I am flying for. Would that aircraft have to be part of a 135 certified carrier or will any rental up for the task be ok?

I would assume that incorporating ones own aircraft would not take care of this requirement but how about renting from an incorporated aircraft that is part of a partnership I am a participant in. Again I am thinking this would not be acceptable but just asking.

My company really hates that I cannot take anyone else on reimbursed trips because it saves them $$ in the long run and keeps me in the office more to get more work accomplished. Just looking for a legit way I can accomplish this and not loose money in the process.

 

[poadeleted20]

So in order to utilize a commercial rating I would have to be renting an aircraft or flying one owned by a company I am flying for.

No. You cannot rent the airplane -- the company must. Otherwise, you are providing to your company both the pilot and the airplane.

And it's a Commercial Pilot certificate, not a rating.

Would that aircraft have to be part of a 135 certified carrier or will any rental up for the task be ok?

If the company rents the plane from some outside source and then makes its own arrangements for a pilot, it's not a 135 operation, and the airplane does not have to come from a 135 operator.

I would assume that incorporating ones own aircraft would not take care of this requirement

Correct. You would still be controlling the operation of the aircraft, so you would be considered to be the aircraft provider. The issue is going to be who actually controls the aircraft, not just the name on the first level of paperwork.

but how about renting from an incorporated aircraft that is part of a partnership I am a participant in. Again I am thinking this would not be acceptable but just asking.

The FAA will apply the "duck test" to this. If it looks like you're providing the aircraft, even though it is technically owned by another entity, they will consider you in violation of Part 135. As you are a partner/co-owner of that aircraft ownership entity, with the ability to control its operation, they will say you are providing the aircraft. If you lease your plane to an FBO, ceding control of it to them, and the company rents the plane from the FBO, then I think you would be legal. But leasing your plane to an FBO just to be able to do this doesn't seem like a very cost-effective way to do things.

My company really hates that I cannot take anyone else on reimbursed trips because it saves them $$ in the long run and keeps me in the office more to get more work accomplished. Just looking for a legit way I can accomplish this and not loose money in the process.

There really isn't one, and that's the way the FAA wants it.

 

[Clip4]

If you lease your plane to an FBO, ceding control of it to them, and the company rents the plane from the FBO, then I think you would be legal.

N123AB registered to Jon Jones
N123AB is leased to FBO Inc. by Jon Jones
Jon Jones is employed by Widget Inc.
Widget Inc leases N123AB from FBO Inc.
Jon Jones, commercial pilot, is PIC with passengers for Widget Inc.

Sure is a lot of Jon Jones in that transaction.

 

[poadeleted20]

N123AB registered to Jon Jones
N123AB is leased to FBO Inc. by Jon Jones
Jon Jones is employed by Widget Inc.
Widget Inc leases N123AB from FBO Inc.
Jon Jones, commercial pilot, is PIC with passengers for Widget Inc.

Sure is a lot of Jon Jones in that transaction.

The question is who controls N123AB, and if the FBO has operational control and Jon Jones doesn't, then I don't see the problem. However, you'd have to read the Jones-FBO lease agreement to know whether or not Jones has any control over the plane. Problem is a lot of owners who lease their planes to FBO's don't like to give the FBO total control, and their lease contracts reflect that.

That said, registering a plane in your name and then leasing it to an FBO has its own legal perils. It is a lot more prudent to have that plane owned by a corporate entity which you own -- helps set the "arm's length" distancing so you are not personally liable if someone crashes that plane while renting it from the FBO, and your monetary liability is limited to your investment in the entity which actually owns the plane.

 

[tmyers]

So the only real reason for me to to pursue the Commercial Certificate would be the higher level of expertise and training. In other words it would make me a better pilot but any aspirations to be reimbursed for flying to my job sites are not available if there are coworkers involved.

 

[poadeleted20]

So the only real reason for me to to pursue the Commercial Certificate would be the higher level of expertise and training. In other words it would make me a better pilot but any aspirations to be reimbursed for flying to my job sites are not available if there are coworkers involved.

If you're talking about your own plane, yes, that's true as far as your own share of the direct cost of the flight is concerned (you can still accept expense sharing from the other people as long as you have common purpose for the flight with them). However, with the CP ticket, your company could rent a plane from a source other than you and then you could fly it for your company with all the non-paying employees/guests the company want to carry.

 

[tmyers]

So if I rented say a C-182 the company would pay for the aircraft in their name. I can take anyone else along legally. Can I be paid for flying that aircraft over and above my regular salary?

And the aircraft I rent does not have to be a part of a 119 or 135 operation to be used for this purpose, but if I used my own aircraft it would have to be set up as a carrier operation?

Have you heard of the NBAA Exemption 7897 for pilot-owners?

 

[poadeleted20]

So if I rented say a C-182 the company would pay for the aircraft in their name.

No -- your company rents the plane, not you. The rental agreement is between your company and the aircraft rental source.

I can take anyone else along legally.

As long as you have a Commercial certificate and medical valid at Second Class level.

Can I be paid for flying that aircraft over and above my regular salary?

No FAA limits on pilot compensation for those exercising CP/ATP privileges.

And the aircraft I rent

Again, you do not rent the plane -- your company does.

does not have to be a part of a 119 or 135 operation to be used for this purpose,

Correct -- corporate aviation is not a commercial operation.

but if I used my own aircraft it would have to be set up as a carrier operation?

Yes -- Part 135 on-demand air taxi/charter, with all the requirements appertaining thereto.

Have you heard of the NBAA Exemption 7897 for pilot-owners?

Yes, and it's not applicable to this situation. We're not talking about your company collecting payment from guests flown in the company's aircraft, we're talking you providing both an aircraft and a pilot to your employer. See http://www.nbaa.org/news/pr/2013/20130329-026.php for more on this exemption.

 

[MBDiagMan]

How does this work if the employee is commercially rated and owns his own plane? Same rules?

Say for example I am commercially rated and I own a 172 for private use. My company has an event in atlanta. I fly 2 employees and myself down for the event. I'd be going regardless. Can I be reimbursed?

As I undeerstand it, if you have a commercial certificate, you can charge however much money for such a flight as you can get them to pay.

 

[tmyers]

I will just sit back and watch

 

[poadeleted20]

As I undeerstand it, if you have a commercial certificate, you can charge however much money for such a flight as you can get them to pay.

With a commercial pilot certificate, you can charge the owner/operator of the aircraft whatever you want/they will pay for flying the plane they provide. As a commercial pilot you cannot charge anyone anything for providing air transportation -- that requires a commercial operator certificate (e.g., air taxi/charter operator certificate issued under Parts 119 and 135). To avoid this pitfall, make sure you are not providing both the airplane and the pilot.

 

[Clip4]

So if I rented say a C-182 the company would pay for the aircraft in their name. I can take anyone else along legally. Can I be paid for flying that aircraft over and above my regular salary?

And the aircraft I rent does not have to be a part of a 119 or 135 operation to be used for this purpose, but if I used my own aircraft it would have to be set up as a carrier operation?

Have you heard of the NBAA Exemption 7897 for pilot-owners?

I just read the NBAA exemption, I really find the FAA's requirement that one has to be a member of NBAA to qualify quite disturbing.

 

[JeffDG]

So if I rented say a C-182 the company would pay for the aircraft in their name. I can take anyone else along legally. Can I be paid for flying that aircraft over and above my regular salary?

And the aircraft I rent does not have to be a part of a 119 or 135 operation to be used for this purpose, but if I used my own aircraft it would have to be set up as a carrier operation?

Have you heard of the NBAA Exemption 7897 for pilot-owners?

The company rents the plane, with you (as an employee of the company) acting as the company's agent.

 

[weilke]

I just read the NBAA exemption, I really find the FAA's requirement that one has to be a member of NBAA to qualify quite disturbing.

This is no different from the exemption on receiving compensation that some of the compassion flight organizations have obtained for their members.

There would be no such exemption if it wasn't for NBAA spending the lawyer money to get it negotiated. I cannot find any fault with the benefit of the waiver being restricted to members of the organization that obtained it.

 

[weilke]

The company rents the plane, with you (as an employee of the company) acting as the company's agent.

Make sure the company is a-ok with being the 'operator' of a flight, including the liability and workmans comp implications that may carry.

 

[JeffDG]

This is no different from the exemption on receiving compensation that some of the compassion flight organizations have obtained for their members.

There would be no such exemption if it wasn't for NBAA spending the lawyer money to get it negotiated. I cannot find any fault with the benefit of the waiver being restricted to members of the organization that obtained it.

And when AOPA/EAA did their request for an exemption for the 3rd Class Medical, they did the same thing...you had to be a member of AOPA/EAA to qualify (if the FAA had approved the exemption that is).

 

[JeffDG]

Make sure the company is a-ok with being the 'operator' of a flight, including the liability and workmans comp implications that may carry.

If you're an employee on the clock, doesn't really matter. They are vicariously liable for your actions anyway.

 

[koehn]

Wow, thanks all for the enlightenment. I had been working with my tax guy (who knows more than a bit about aviation taxes), and he had been recommending I buy my plane personally and have my company reimburse me for expenses. But that leaves me unable to carry anyone else.

Am I correct in that if my company (which I wholly own) buys the plane then I can act as PIC and fly myself and others to other locations provided all passengers are flying on company business and be reimbursed for it? And if I own the plane personally I cannot be so reimbursed?

Sounds like an aviation attorney might be the most authoritative, but I'd like to vet that idea with this group first.

 

[ronnieh]

I think if you control the plane by owning the company you will be on very thin ice. I think I will wait on Ron for this.

 

[gprellwitz]

Wow, thanks all for the enlightenment. I had been working with my tax guy (who knows more than a bit about aviation taxes), and he had been recommending I buy my plane personally and have my company reimburse me for expenses. But that leaves me unable to carry anyone else.

Am I correct in that if my company (which I wholly own) buys the plane then I can act as PIC and fly myself and others to other locations provided all passengers are flying on company business and be reimbursed for it? And if I own the plane personally I cannot be so reimbursed?

Sounds like an aviation attorney might be the most authoritative, but I'd like to vet that idea with this group first.

To throw a wrinkle into this (as if we need another), if the company owns the plane then under some circumstances they would need to have a Part 135 certificate if they were to be compliant with both FAA and IRS regulations. The disparity between the two sets of regulations can lead one to do things that would seem to make sense at first, but that would get you into trouble over time. This was from a discussion with an aviation tax attorney on Hangar Talk, an aviation radio show out of Houston in the past few months. I don't happen to recall the specifics, just enough to know that I'd want really good professional advice before jumping into this on my own, not just what some guy on the internet (or on a radio show) said.

 

[weilke]

If you're an employee on the clock, doesn't really matter. They are vicariously liable for your actions anyway.

Even worse, workmans comp wise they are liable if you are on the way to work or back. One reason many corps even forbid you to commute to work by plane.

 

[weilke]

Am I correct in that if my company (which I wholly own) buys the plane then I can act as PIC and fly myself and others to other locations provided all passengers are flying on company business and be reimbursed for it? And if I own the plane personally I cannot be so reimbursed?

Silly as it is, you cannot. See the Mangiamele interpretation.

Get a commercial and you are fine to fly the company plane while getting paid for it.

 

[bluerooster]

Even if this were to be, I'm not sure how many companies allow their employees to fly GA aircraft for business travel. I tried last week for a company trip to another facility which was a stone's throw from an airport. I would have been there in less than half the time to drive, but it was against company policy, even if I paid for it. AND we are an aerospace company!

Now that is just plane mean on their part.

 

[ronnieh]

Why is that mean? Seems like the CEO or board is simply not willing to expose the company to that much risk for such a miniscule return. In fact this very thing is why I think Dr. Mack's law would have very little impact since very few companies will expose themselves to that kind of risk.

Also I am not sure if Brad owns the company that owns the plane that he can carry passengers without the 135. I am waiting to see what Ron says about it. The duck test might apply.

 

[Cmercado]

Guys,

So, this is the hypothetical facts...

- I am the CEO of XYZ Corp
- XYZ Corp owns or operate a Part 91 Light twin (Baron, Aztec, Seneca, Navajo.. Pick one..)
- XYZ Corp is member of NBAA
- XYZ Corp can charge their "guests" twice the cost of pilot, fuel, oil, landing fees, insurance, tie downs....
- XYZ is legally compliant with the FAA

Any of the FAA experts please confirm if I am correct,
Thanks

 

[poadeleted20]

And when AOPA/EAA did their request for an exemption for the 3rd Class Medical, they did the same thing...you had to be a member of AOPA/EAA to qualify (if the FAA had approved the exemption that is).

Only difference is NBAA got theirs and AOPA/EAA didn't.

 

[poadeleted20]

Am I correct in that if my company (which I wholly own) buys the plane then I can act as PIC and fly myself and others to other locations provided all passengers are flying on company business and be reimbursed for it?

No. If your company owns the plane and pays all the bills, there is no cost to you to be reimbursed. If the company doesn't pay all the bills, then the company isn't operating the plane, you are -- and you're back in the legal hole. Of course, if the company does buy and operate the plane and pay the bills, you then are subject to all sorts of IRS limitations on your own non-business use of the company's plane, and you'll need a Commercial Pilot certificate to be acting as the company's pilot on those business flights.

And if I own the plane personally I cannot be so reimbursed?

Correct, although your passengers can pay theiir shares of the direct expenses of the flights and then be reimbursed for their shares by their employer (your company) -- you just can't be reimbursed for your own share of the expenses.

 

[poadeleted20]

To throw a wrinkle into this (as if we need another), if the company owns the plane then under some circumstances they would need to have a Part 135 certificate if they were to be compliant with both FAA and IRS regulations.

Only if they're charging people for their flights, and that's not how corporate operations work. Even then, under the NBAA exemption, an NBAA member company may still be able collect from guests or subsidiary companies for flights provided to those guests or the employees of the subsidiary without a 135 certificate.

 

[poadeleted20]

Also I am not sure if Brad owns the company that owns the plane that he can carry passengers without the 135. I am waiting to see what Ron says about it. The duck test might apply.

The only way it becomes a 135 operation is if Brad's company is charging people for the ride. If it's all provided by the company to its employees or guests without charge, and just comes out of company funds, it's not a 135 operation.

 

[poadeleted20]

Guys,

So, this is the hypothetical facts...

- I am the CEO of XYZ Corp
- XYZ Corp owns or operate a Part 91 Light twin (Baron, Aztec, Seneca, Navajo.. Pick one..)
- XYZ Corp is member of NBAA
- XYZ Corp can charge their "guests" twice the cost of pilot, fuel, oil, landing fees, insurance, tie downs....
- XYZ is legally compliant with the FAA

Any of the FAA experts please confirm if I am correct,
Thanks

I don't have the full text of the exemption in front of me, but I do not believe it covers more than "cost sharing," i.e., the pro rata share of the direct operating cost of the flight. In addition, there's a lot of paperwork which must be prepared, signed by all parties, and filed with the FSDO. See http://www.alanarmstronglaw.com/docs/148.pdf for a discussion on this.

IOW, it's not as simple as Cmercado suggests.

 

[Cmercado]

"FAR §91.501 (d)(1) through (10). These items are essen- tially are twice the cost of fuel, travel expenses of the crew, hangar and tie-down expenses, insurance for the specific flight, landing fees, airport taxes, custom and foreign permit fees, in-flight food and beverages, passenger ground transporta- tion and weather briefing contract services. In essence, this is a “wet lease,” since the air- craft is provided with the flight crew. This is a “time-sharing agreement” that is defined in
FAR §91.501(c)(1)"

This is what the NBAA exception says....You can not do "common carriage" . That is pretty clear... But apparently allows you to at least recover some cost via private carriage.

Lets see if a member of NBAA reads the post and share some info...