Federal excise taxes (FET) are taxes imposed on either fuel or on the transportation of persons or property. Both private and commercial business aircraft operators pay FET. Most private operators operating under Part 91 pay FET (fuel tax) on non-commercial flights. Commercial operators, those persons operating under Part 135, are subject to the tax on the transportation of persons or property.
For non-commercial transportation, the fuel tax is a cents-per-gallon tax. There are different rates for both aviation gasoline and jet fuel. Mostly, this type of FET applies only to non-commercial transportation. While this tax is paid/used in commercial transportation, the ultimate purchaser can usually claim a refund less a small portion of the tax.
For commercial transportation, FET takes the form of a percentage tax or a head tax, or both. Primarily, FET is a percentage tax on the amount paid for commercial transportation. However, FET can consist of a segment fee due on each domestic segment and a head tax (which applies to the international transportation of persons).
The Internal Revenue Service (IRS) and Federal Aviation Administration (FAA) consider commercial and non-commercial operations differently. Operations that might be viewed as non-commercial by the FAA could be considered to be commercial by the IRS for FET purposes.