A provision inserted into a 2005 highway bill that has given business and general aviation fuel purveyors a collective headache ever since it was enacted might be repealed in the next highway reauthorization bill. Thirty-two members of the House of Representatives signed a letter to Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, asking that the provision be deleted from new highway legislation now under consideration.
Highway Trust Fund
The National Air Transportation Association (NATA) is calling on its members to urge their congressional representatives to include language in pending legislation to repeal the “fuel fraud” provision. The provision, part of the 2005 Highway Bill, changed the collection of taxes for non-commercial jet fuel and required them to be deposited into the Highway Trust Fund.
With the House of Representatives scheduled to vote this week on H.R.7, a Federal Highway Administration reauthorization bill, NATA is lobbying to get a provision included in the bill that would repeal the “onerous fuel fraud tax.” The fuel fraud provision, which was included in a 2005 FHA bill, changed the collection of taxes for noncommercial aviation jet fuel and required the funds to be deposited into the Highway Trust Fund.
Congress last month once again extended the FAA’s current authorization and aviation taxes until December 14, making it increasingly unlikely that the question of how to pay for operating the FAA and simultaneously modernizing the entire air traffic system will be settled anytime soon.
The Senate Finance Committee has approved a bill that would repeal the onerous “fuel fraud” provision enacted into law as part of the 2005 Highway Bill. Although the law dealt with surface transportation, it contained a provision that aviation jet fuel taxes be collected at the highway diesel fuel rate of 24.4 cents per gallon as opposed to the aviation rate of 21.9 cents per gallon.
The Senate last week passed the Surface Transportation Reauthorization Act (the “Highway Bill”), which authorizes surface transportation spending through fiscal year 2009. The legislation includes two provisions that could affect business aviation if signed into law, according to NBAA.
A provision in the legislation to reauthorize the nation’s surface transportation programs, known as the Highway Bill, would “drastically alter the way the taxes on jet fuel are collected,” according to the National Air Transportation Association. Under the proposal, jet fuel would be taxed at the same 24.4-cent-per-gallon rate as diesel fuel.
NBAA and the National Air Transportation Association are creating a joint working group to address the fuel tax provisions of the Highway Bill that was signed by the President earlier this month. “Of particular concern is that taxes on jet fuel will be assessed at the diesel fuel rate [24.4 cents per gallon instead of the 21.9-cent per-gallon jet fuel rate] and deposited into the Highway Trust Fund,” NBAA said.
NBAA, the National Air Transportation Association and General Aviation Manufacturers Association recently urged the Department of Treasury to suspend the changes to jet fuel taxation provisions that were contained in H.R.3, the Highway Bill.
Business aviation lobbyists yesterday applauded recent action taken by Republican lawmakers 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. At the request of NBAA, NATA and GAMA, Sen. Ted Stevens (R-Ark.), Sen. Conrad Burns (R-Mont.) and Rep. Robin Hayes (R-N.C.) sent letters to U.S.
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