Private jet sales reached $40.3 billion in 2025, up nearly 24% over five years and growing at an annual rate of 4.7%, according to the Institute for Policy Studies. Yet the same aviation system is built on a tax structure that lets private flyers contribute far less than commercial travelers relative to their share of flights.
The numbers come first. Noncommercial private jets account for about 7% of flights handled by the Federal Aviation Administration, but contribute just 0.6% of the taxes flowing into the fund that helps finance it, according to the Department of Transportation. Fortune reported that the federal ticket tax applies to commercial airfares, with 7.5% of the fare going to Washington, while private jets are not subject to the same ticket tax.
IPS said the arrangement amounts to a 'taxpayer subsidy' for private aviation. The report estimates that the private-jet class benefiting from it includes 256,000 people, or just 0.003% of the global population, and holds $31 trillion in wealth. Chuck Collins, coauthor of the report and director of the Program on Inequality and the Common Good at IPS, said, 'We all chip in for private jet travel' and 'We all subsidize this tiny segment of the ultra rich and their transportation.'
The tax advantages do not stop there. Last year, President Donald Trump’s One Big Beautiful Bill Act restored 100% bonus depreciation for qualifying business assets, including private aircraft. That allows an eligible buyer to deduct the full cost of a jet in the year it is put into service instead of spreading the deduction over several years.
Justin Crabbe, CEO of the private jet marketplace Jettly, told Fortune he now sees companies buy $75 million private jets to 'wash a lot of tax obligations off of their plate just by way of that purchase.' He said some buyers do not even need the aircraft and can put it into charter service to support a business-use case.
IPS gave the example of a $40 million jet and estimated that the first-year deduction could cut a buyer’s federal tax liability by as much as $14.8 million at a 37% rate, depending on taxable income, business use, and other circumstances. The report said it could not calculate total federal tax revenue foregone from the provision.
State tax policy adds another layer. IPS said eight states have full or near-total sales tax exemptions on private jet purchases, including Alaska, Oregon, New Hampshire, New York, and Massachusetts. In Massachusetts, the exemption will cost the state $25.3 million this year, according to an estimate from the Massachusetts Budget and Policy Center.
Private aviation groups are fighting to preserve the breaks. The National Business Aviation Association and other aviation groups argue the tax treatment supports jobs, and the NBAA spent a combined $3.4 million lobbying in 2024 and 2025, according to IPS. The trade group also opposed a 10% luxury tax on aircraft worth more than $10 million in Washington.
Capital rewards clear rules, but this is not a level market. Public infrastructure and favorable tax policy are being used to subsidize a tiny class of ultra-wealthy flyers while the taxpayer absorbs more of the cost. The market has already voted for private aviation. Washington, and several state capitals, have voted to help pay for it.
