New Part 107 Drone Regulations Created Some Clear Winners

The new FAA Part 107 regulations created clear winners among those who follow the rules in the following businesses:

  • Agriculture
  • Construction site management
  • Environmental research
  • Infrastructure inspection (utilities, energy, telecommunications)
  • Mapping/Surveying
  • Real Estate sales
  • Video/Movie/Photography

These winners will benefit from lower cost service providers due to the reduced barriers to entry; however, there will always be opportunities for those drone service providers that can differentiate their services with a clear brand, appropriate cost structure, and bundled services.

Remember, quality and safety always count.

 

Flying Drones for Work/Business

See the NEW Small UAS Rule (Part 107) effective August 2016:

  • Must be at least 16 years old
  • Must pass an initial aeronautical knowledge test at an FAA-approved knowledge testing center+
  • Must be vetted by the Transportation Safety Administration (TSA)

    +A person who already holds a pilot certificate issued under 14 CFR part 61 and has successfully completed a flight review within the previous 24 months can complete a part 107 online training course at www.faasafety.gov to satisfy this requirement.

For more information, read about Remote Pilot Certification.

Aircraft Requirements:

Operating Rules:

  • Class G airspace*
  • Must keep the aircraft in sight (visual line-of-sight)*
  • Must fly under 400 feet*
  • Must fly during the day*
  • Must fly at or below 100 mph*
  • Must yield right of way to manned aircraft*
  • Must NOT fly over people*
  • Must NOT fly from a moving vehicle*

    * All of these rules are subject to waiver

    Applicants should submit their waiver requests to the FAA as early as possible. Processing time depends on the complexity of the request; however, the agency strives to respond within 90 days.

    Certificates of waiver may include specific special provisions designed to ensure that the small UAS operation provides an equivalent level of safety as part 107.

    • Standard special provisions for Part 107 waivers (coming soon)

Flying Drones for Fun

You don’t need permission from the FAA to fly SOME UAS (aka drones) for fun or recreation, but you must always fly safely.

Examples of UAS that do and do not require registration (PDF)

If you do need permission, then before you fly outside you must:

  • Register your UAS if it weighs more than 0.55 pounds and less than 55 pounds, and you’ll need:
    1. Email address
    2. Credit or Debit card
    3. Physical address and mailing address (if different from physical address)
    4. Registration costs $5 and is valid for 3 years.
  • Label your UAS with your registration number
  • Read and understand all safety guidelines

You must be:

  • 13 years of age or older (if the owner is less than 13 years of age, a person 13 years of age or older must register the small unmanned aircraft)
  • A U.S. citizen or legal permanent resident*

* Visiting foreign nationals must register their UAS upon arrival in the United States (online registration serves as a certificate of ownership).

Safety Guidelines

  • Fly at or below 400 feet
  • Keep your UAS within sight
  • Never fly near other aircraft, especially near airports
  • Never fly over groups of people (except those part of the operation)
  • Never fly over stadiums or sports events
  • Never fly near emergency response efforts such as fires
  • Never fly under the influence
  • Be aware of airspace requirements

New FAA Drone Rules Published: Likely Effective in August

On June 21, 2016 the FAA released much awaited Part 107 regulations detailing commercial drone use; the regulations will likely become effective in August 2016.

These new regulations provide guidance for routine commercial use of small unmanned aircraft systems (summary).

Part 107 will not apply to model aircraft.  Model aircraft operators must continue to satisfy all the criteria specified in Section 336 of Public Law 112-95 (PDF) (which will now be codified in Part 101), including the stipulation they be operated only for hobby or recreational purposes.

Summary of New FAA Commercial Drone Leaked

Those wishing to use commercial drones have been waiting for many months for the FAA to issue regulations for their.  According to www.dronelawjournal.com the rules are supposed to be officially issued June 21, 2016; however, a leaked copy of a summary of the new Part 107 drone rules has been made available and published on various websites (FAA’s summary).

The significant changes from the notice of proposed rulemaking that was issued in February 2015 are:

  • The minimum age for a Remote Pilot in Command is now 16-years-old;
  • The maximum altitude has been changed to 400 feet AGL;
  • There is a read, speak, write and understand English requirement; and
  • Current Part 61 manned aircraft certificate holders will only have to take and pass an online test.

The new Part 107  – according to the leaked summary – will eliminate many of the most cumbersome and expensive requirements currently imposed on commercial drone operators, including the requirement for a so-called 333 exemption, a manned aircraft pilot’s license, a visual observer, the requirement to hold a certificate of authorization and the requirement to issue a notice to airmen before each flight.

§168(k): Bonus Depreciation is Another Important Cost Recovery Tool

Bonus depreciation under §168(k) provides that the taxpayer may deduct 50% of the cost of qualifying new assets put into service in taxable years from 2015 to 2017, phasing down to 40% in 2018 and 30% in 2019.

This means that an unraced, untrained Thoroughbred yearling is eligible for bonus depreciation because a buyer will be placing the horse in service for the first time. It’s a “new” horse for bonus depreciation purposes. However, a Thoroughbred sold as a 2-year-old in training probably is not, nor is a mare in foal.

Note that changing how the horse is used, buying a show hunter as a broodmare for example, does not constitute a new “original use” for bonus depreciation purposes.

To summarize, the tax rules provide that a horse business with “used” qualifying property may:

  1. First take a 179 expense, if any
  2. Then take MACRS expense

However, a horse business with “new” qualifying property may:

  1. First take 179 expense, if any
  2. Then take 168(k) bonus depreciation
  3. And then take MACRS expense

Importantly, if §179 does not apply because of certain limit triggers then bonus depreciation and MACRS still apply.

So you can see that by taking §179, and bonus depreciation, and MACRS, those taxpayers with qualifying property have significant cost recovery tools.