Bloomberg News

Buffett’s NetJets Sues U.S. Over $642.7 Million in Taxes

November 21, 2011

(Updates with excerpt from complaint in fourth paragraph.)

Nov. 17 (Bloomberg) -- NetJets, the private-aircraft company owned by Warren Buffett’s Berkshire Hathaway Inc., sued the U.S. over excise taxes and penalties totaling $642.7 million assessed against the company.

The Internal Revenue Service improperly assessed the so- called ticket tax, an excise tax on payments made in exchange for air transportation, NetJets said in its complaint in federal court in Columbus, Ohio, dated Nov. 14.

NetJets seeks a refund and abatement of the ticket tax. The company claims in its suit that Congress intended the tax to apply to passengers who use commercial or charter aircraft owned by others.

“The ticket tax was not intended to apply to private aircraft owners and the fees they pay to maintain and operate their aircraft,” NetJets said in the complaint.

NetJets also claimed that the IRS didn’t provide any guidance about the types of fees for which the company would have to collect the ticket tax from passengers.

Anthony Burke, a spokesman for the IRS, said in a telephone interview that the agency doesn’t discuss pending litigation.

The suit was filed by subsidiaries of Columbus-based NetJets Inc., which isn’t a party to the suit. Omaha, Nebraska- based Berkshire Hathaway Class A shares rose $1,064 to $113,276 at 10:03 a.m. in New York Stock Exchange composite trading.

The case is NetJets Large Aircraft Inc. v. U.S., 2:11-cv- 01023, U.S. District Court, Southern District of Ohio, (Columbus).

--Editors: Charles Carter, Andrew Dunn

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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