Internal Revenue Service
Revenue Ruling

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Rev. Rul. 2003-25
Rev. Rul. 2003-25, 2003-13 I.R.B. 642, 2003-1 C.B. 642
                       Internal Revenue Service (I.R.S.)
                                 Revenue Ruling
                   FRINGE BENEFITS AIRCRAFT VALUATION FORMULA
                            Published: March 31, 2003

 Section 61.--Gross Income Defined, 26 CFR 1.61-21: Taxation of fringe benefits.

  Fringe benefits aircraft valuation formula. For purposes of section 1.61- 21(g) of the regulations, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge in effect for the first half of 2003 are set forth for determining the value of non-commercial flights on employer-provided aircraft.

  Fringe benefits aircraft valuation formula. For purposes of section 61 of the Code, relating to the rule for valuing noncommercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge in effect for the first half of 2003 are set forth.

  For purposes of the taxation of fringe benefits under section 61 of the Internal Revenue Code, section 1.61-21(g) of the Income Tax Regulations provides a rule for valuing noncommercial flights on employer-provided aircraft. Section 1.61-21(g)(5) provides an aircraft valuation formula to determine the value of such flights. The value of a flight is determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or SIFL) by multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in section 1.61-21(g)(7) and then adding the applicable terminal charge. The SIFL cents-per-mile rates in the formula and the terminal charge are calculated by the Department of Transportation and are reviewed semi-annually.

  The following chart sets forth the terminal charges and SIFL mileage rates:

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Period During Which the Flight Is Taken  Terminal Charge  SIFL Mileage Rates
1/1/03 - 6/30/03                         $37.76           Up to 500 miles
                                                          = $.2065 per mile
                                                          501-1500 miles
                                                          = $.1575 per mile
                                                          Over 1500 miles
                                                          = $.1514 per mile
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DRAFTING INFORMATION

  The principal author of this revenue ruling is Kathleen Edmondson of the Office of Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). For further information regarding this revenue ruling, contact Ms. Edmondson at (202) 622-6040 (not a toll-free call).

 Rev. Rul. 2003-25, 2003-13 I.R.B. 642, 2003-1 C.B. 642