This article provides an overview of the recently released Rev. Rul. 2025-9, which details the updated Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charge for valuing noncommercial flights on employer-provided aircraft under Section 61 of the Internal Revenue Code (IRC). This guidance is crucial for tax practitioners advising clients on the taxation of fringe benefits.

Background and Authority

The valuation of fringe benefits, including the use of employer-provided aircraft for noncommercial flights, falls under the purview of IRC Section 61, which defines gross income. Specifically, 26 CFR § 1.61-21(g) of the Income Tax Regulations provides a rule for valuing such flights.

Valuation Methodology

Revenue Ruling 2025-9 clarifies the application of the aircraft valuation formula outlined in § 1.61-21(g)(5). This formula, commonly referred to as the SIFL formula, determines the value of a noncommercial flight by multiplying the applicable SIFL cents-per-mile rates by the appropriate aircraft multiple, as provided in § 1.61-21(g)(7), and subsequently adding the applicable terminal charge.

It is important to note that the SIFL cents-per-mile rates and the terminal charge are calculated and reviewed semi-annually by the Department of Transportation (DOT).

Updated SIFL Rates and Terminal Charge (January 1, 2025 - June 30, 2025)

Rev. Rul. 2025-9 sets forth the following terminal charge and SIFL mileage rates applicable for flights taken during the period of January 1, 2025, through June 30, 2025:

Terminal Charge: $52.44
SIFL Mileage Rates:
- Up to 500 miles: $0.2869 per mile
- 501-1500 miles: $0.2187 per mile
- Over 1500 miles: $0.2103 per mile

Application of the Revised Rates

To determine the taxable value of a noncommercial flight on an employer-provided aircraft during the first half of 2025, practitioners must use the SIFL rates detailed above, along with the relevant aircraft multiple specified in § 1.61-21(g)(7) and the terminal charge of $52.44. The calculation involves determining the applicable mileage bracket for each leg of the flight and applying the corresponding per-mile rate. The result is then multiplied by the appropriate aircraft multiple and the $52.44 terminal charge is added to arrive at the taxable fringe benefit.

Future Modifications

As the SIFL rates and terminal charge are subject to semi-annual review and calculation by the DOT, the values provided in Rev. Rul. 2025-9 will be in effect for flights taken between January 1, 2025, and June 30, 2025. Tax practitioners should anticipate a subsequent revenue ruling providing updated rates applicable for flights taken on or after July 1, 2025.

Further Information

For further clarification regarding Rev. Rul. 2025-9, the principal author, Kathleen Edmondson of the Office of Associate Chief Counsel (Employee Benefits, Exempt Organizations and Employment Taxes), can be contacted at (202) 317-6798 (not a toll-free call).

This guidance from Rev. Rul. 2025-9 is essential for accurately valuing noncommercial flights on employer-provided aircraft and ensuring compliance with federal tax regulations. Practitioners should carefully review these updated rates and their application.

Prepared with assistance from NotebookLM.