How to Start an Air Charter Brokerage

Starting a private jet charter brokerage in the United States takes less paperwork than most people expect. There is no federal broker licence to apply for, as the US licence and certification page explains. What you do need is an ordinary business, a plan for federal excise tax, the right insurance, a safe way to handle client money, and a realistic route to your first clients.

This is the founder's checklist for a US-based charter brokerage, for readers who have already chosen charter over sales; if you have not, start with how to become an aircraft broker. It is a summary for orientation, not legal or tax advice. Check each point with an aviation attorney and a tax professional.

1. Form the business

Your first decision is the legal structure, such as a limited liability company or a corporation. The US Small Business Administration says an LLC protects owners "from personal liability in most instances". The SBA also suggests consulting "business counselors, attorneys, and accountants" first.

Formation happens at state level. For an LLC you file articles of organization, which the SBA describes as "a simple document that describes the basics of your LLC". You will "probably need to register with any state where you conduct business activities", so a broker selling into several states should ask an attorney where registration applies. Filing fees and annual report rules differ by state; check your Secretary of State's website for current figures.

Next comes an Employer Identification Number (EIN). The IRS says businesses "need an EIN to manage their taxes", and that "you never have to pay a fee for an EIN". Apply directly on irs.gov.

Finally, open a business bank account before the first payment arrives. The SBA's guidance is to do it "as soon as you start accepting or spending money as your business". Keeping client money out of personal accounts also makes refunds easier to track.

2. What Part 295 means for how you sell

14 CFR Part 295 is the Department of Transportation rule for air charter brokers. It is not a licence. It does change how a new brokerage markets and quotes, from day one:

• Your website and ads. All solicitation materials, including web pages, must state clearly that you are an air charter broker and not the direct air carrier in operational control (14 CFR 295.23). Put it on your site and social profiles before launch.
• Your quotes and contracts. Before a contract is signed you must name the operating carrier, state whether you act as agent or as indirect air carrier, and say whether you hold liability insurance and to what limits (14 CFR 295.24). Build these into your quote template.
• Who you can sell. You may only arrange flights on carriers that hold the required DOT and FAA authority (14 CFR 295.20).

The capacity you choose, agent or principal, also affects the excise tax question below. For the rule section by section, read what Part 295 requires you to disclose.

3. The federal excise tax on air transportation

Section 4261 of the Internal Revenue Code taxes "the amount paid for taxable transportation of any person" by air at 7.5%. It adds a flat tax for each domestic segment, which the IRS set at $5.30 for 2026, and a separate tax on international flights that begin or end in the United States, set at $23.40 per person for 2026 (IRS Publication 510, December 2025). For a chartered aircraft, the IRS says the segment tax is multiplied "by the number of passengers transported on the aircraft".

There is a narrow exemption for aircraft with a maximum certificated takeoff weight of 6,000 pounds or less that are not flown on an established line. It does not apply to jets: the IRS says the taxes apply "if the aircraft is jet-powered, regardless of its maximum certificated takeoff weight". So a jet charter within the United States is generally taxable unless another exemption in Publication 510 applies.

Who collects it in a brokered charter

Whoever pays for the flight owes the tax (26 U.S.C. 4261(d)). The law places the duty to collect on "every person receiving any payment" for the transportation (26 U.S.C. 4291). The collector files Form 720, the Quarterly Federal Excise Tax Return. Publication 510 applies this to intermediaries in three ways:

How the intermediary acts	What the IRS says about collecting the tax
As an independent principal that charters the aircraft and resells it	Must collect the tax, file the returns and pay it to the government
As the agent of the carrier	Collects the tax and remits it to the carrier, which files and pays
As an independent third party acting for, and paid by, the passenger	Not required to collect the tax and pay it over

These map loosely onto Part 295's indirect air carrier and bona fide agent, but the IRS examples come from tour operators and scheduled airline tickets (Revenue Rulings 75-296 and 2006-52), not single-entity private jet charter. We could not find IRS guidance that settles two common questions: whether a charter broker's markup or fee is part of the taxable amount, and who collects when an agent passes the client's payment to the operator. If you act as principal, assume you may be the collector until a tax professional who handles aviation excise tax tells you otherwise. If the tax is not paid when the transportation is paid for, the IRS says the air carrier providing the initial segment becomes liable for it, so agree with each operator in writing who collects.

4. Insurance to look at

Part 295 makes you tell every charterer whether you hold liability insurance and its limits, so your cover shows up in every quote. The categories to discuss with a specialist aviation insurance broker:

• General liability. The SBA describes it as protection against loss from "bodily injury, property damage, medical expenses", plus libel, slander and defending lawsuits.
• Professional liability, or errors and omissions. Protection against loss from "malpractice, errors, and negligence", in the SBA's words. ITIC, an insurer of transport intermediaries, calls this professional indemnity and tells brokers to buy it "with a sufficient limit and a deductible you can afford".
• Non-owned aircraft liability. ITIC describes it as cover for bodily injury and property damage arising from your contractual use of aircraft you do not own, and says it matters most "if you back-to-back the charter contracts".

None of these replaces the operator's own aircraft insurance. Premiums are quoted per applicant. We found no insurer that publishes a standard broker rate, so we give none here.

5. Payments and client funds

Part 295 sets refund duties. A broker "must make prompt refunds of all monies paid for charter air transportation" when the flight cannot be performed or a refund is otherwise due. Cash and check refunds are due within 20 days of a complete request, and credit card refunds follow federal credit rules (14 CFR 295.26). If a disclosed fact changes and you do not tell the charterer in time, they may cancel for a full refund (14 CFR 295.24).

We found no federal rule that requires a single-entity charter broker to hold client payments in escrow or a separate trust account. That does not rule out state law, card network rules or contract terms that do, so ask your attorney. Practical habits:

• Take client money only into the business account, never a personal one.
• Put payment, cancellation and refund terms in writing before you take a deposit. ITIC calls standard trading terms a broker's "first source of risk management".
• Where possible, ITIC suggests contracting the operator directly with the customer; otherwise keep your two contracts fully back-to-back.
• Confirm any new bank details by phone before sending or requesting a wire. ITIC says most email fraud it sees "could have been avoided by simply picking up the phone".

6. The tools you need

A charter brokerage runs on a sourcing marketplace to find aircraft and quote trips, operator safety audit data, a CRM, a quote and contract template that carries the Part 295 disclosures, and a payment method you can refund promptly. What each tool does, and what its vendor publishes about price, is on aircraft broker tools.

7. Operator vetting

Part 295 bars you from arranging flights on a carrier without the required DOT and FAA authority, and from selling a flight you have reason to know cannot be legally performed. Before a new brokerage quotes its first trip, it needs a written vetting routine: the operator's certificate, insurance, safety audit status and who holds operational control. Charter broker due diligence sets out that routine and what each audit report does and does not tell you.

8. Finding the first clients

Nobody can tell you how long this takes. Common starting points:

• Your existing network. People who already fly privately, or who arrange travel for someone who does: executive assistants, family office staff, event and tour organisers, sports and entertainment managers.
• Operators and other brokers. Introduce yourself to the operators you have vetted and to brokers who focus on other regions or aircraft types. Reliability on small trips is how those relationships start.
• A narrow niche. One route, one region or one type of client is easier to be known for than "private jets" in general.
• Industry events. Trade shows put operators and buyers in one place; budget for them on the cost page.
• A compliant website. Your Part 295 broker statement, a quote form and plain answers to common questions.

Answer every enquiry quickly, quote honestly and never present yourself as the operator.

9. What it realistically costs

The first-year bill for an independent broker includes state formation and annual fees, insurance, sourcing and data subscriptions, a website, event travel, any training you choose, and the largest item for most people: living costs during the months before the first commission. The first-year cost calculator lists each item with the vendor's published price where one exists, and takes your own quotes for the rest.

10. Employed first or independent first?

• Employed first. A brokerage gives you its tools, operator relationships, compliance process and insurance, and someone to check your quotes. You keep a smaller share of each booking, and the clients usually stay with the firm. Read any non-compete clause before you sign.
• Independent first. You keep more of each booking and build your own brand, but every item on this page is yours to set up and pay for before you earn anything.

Many people start employed to learn the work inside an established firm, then go independent once they have operator contacts and repeat clients. Aircraft broker jobs covers the titles brokerages hire under. If you want structured help with this decision, IABI, which publishes this guide, sells a coaching programme of eight weekly sessions, in a small group or one to one. Like any coaching, it cannot guarantee clients or income.

Outside the United States

Part 295, the US excise tax and US state formation rules apply only to a US business. Other countries have their own regulators and tax rules. See the UK and EU, the GCC and Canada.

How brokers find clients, and the advertising, email and calling rules that apply, is set out in marketing and prospecting for aircraft brokers.

Frequently asked questions

Do I need a licence to start a charter brokerage in the US?

No federal broker licence exists. You need an ordinary business entity, an EIN, and compliance with 14 CFR Part 295, the DOT rule on broker advertising and disclosures. Some states register aircraft dealers, which mainly affects sales brokers.

Does a charter broker have to collect the 7.5% federal excise tax?

It depends on capacity. IRS Publication 510 says an independent intermediary that charters aircraft and resells as principal must collect and pay it over, while one acting only for the passenger need not. IRS guidance does not address every brokered charter structure, so confirm yours with a tax professional.

What insurance does a charter broker need?

No federal rule sets a minimum, but Part 295 requires you to disclose whether you hold liability insurance and its limits. The usual categories are general liability, professional liability (errors and omissions) and non-owned aircraft liability. Insurers quote each applicant individually.

Can I start a charter brokerage from home?

Yes. Sourcing, quoting and contracting happen by phone, email and online platforms. You still need a state-registered entity, an EIN and a business bank account, and your website must state that you are a broker, not the carrier.

Sources

Every source below was checked on 17 October 2026.

• eCFR, 14 CFR Part 295, Air Charter Brokers (sections 295.20, 295.23, 295.24, 295.26)
• Cornell LII, 26 U.S.C. 4261, Imposition of tax
• Cornell LII, 26 U.S.C. 4291, Cases where persons receiving payment must collect tax
• IRS, Publication 510, Excise Taxes (December 2025), chapter 4, Transportation of Persons by Air
• IRS, Internal Revenue Bulletin 2006-43, Revenue Ruling 2006-52 (resellers of air transportation)
• IRS, Get an employer identification number
• SBA, Choose a business structure
• SBA, Register your business
• SBA, Open a business bank account
• SBA, Get business insurance
• ITIC, Top 10 checklist for air charter brokers (insurer guidance)
• IABI, Coaching Program (publisher of this guide)