As the FAA wrestles with how to generate a stable and predictable revenue stream to fund its operations, the head of the Air Transport Association (ATA) went before a Senate panel to request a one-year reprieve from the 4.3-cent federal tax on jet fuel.
Fuel taxes in the United States
The National Association of State Aviation Officials (NASAO) is urging Congress to resist all attempts to “raid” the Airport and Airway Trust Fund, including airline industry calls for new tax breaks, and the National Air Transportation Association (NATA) reiterated its preference for having general aviation contribute to the fund through taxes on aviation fuels.
Republican lawmakers have taken steps to shelve new tax rules in the 2005 Highway Bill designed to discourage truckers from using jet fuel to avoid higher taxes on diesel fuel. Sens. Ted Stevens (R-Alaska) and Conrad Burns (R-Mont.) and Rep. Robin Hayes (R-N.C.) sent letters to U.S.
Business aviation groups welcomed a letter from the FAA to the commissioner of internal revenue asking him to suspend implementation of new fuel tax rules that would impose a “significant administrative burden” on general aviation businesses and “create financial risk for the Airport and Airways Trust Fund.” The new rules would raise the tax rate on jet fuel to that of costlier highway diesel fuel but allow aviation jet fuel buyers to apply fo
If the provision is accepted by the House and the bill signed by the President, all aviation fuel will be taxed at the same rate as highway diesel fuel–24.4 cents per gallon. The purchaser would then have to submit a claim to the Internal Revenue Service to receive the difference between the 24.4 cents paid and the 21.8 cents per gallon actually owed.
— The Senate and the House closed up shop at the end of July for their customary August vacation. By that time, legislators had introduced 1,552 bills in the Senate and 3,615 in the House of Representatives, a near record. At press time Congress had passed only two of the 13 annual spending bills as the September 30 deadline approached.
Although the FAA is not yet advocating new taxes or user fees, the agency continues to emphasize that it needs a consistent, stable revenue stream that is not tied to the price of an airline ticket.
All the public uproar and the introduction of numerous bills seeking to control lobbying abuse prompted by the scandals involving one-time, big-time lobbyist Jack Abramoff and former Congressman Randy “Duke” Cunningham (R-Calif.), convicted of taking bribes from defense contractors, have produced what might be only watered-down results.
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