New York’s state Senate last week passed legislation (S.3655) sponsored by Sen. Bill Larkin (R-39th District) to provide a sales and use tax exemption on general aviation airplanes to be operated under Part 91 and purchased in the state. The exemption, if passed by the state Assembly and signed by the governor, would take effect on December 1.
While the debate continues over how best to fund the next-generation air transportation system, the Government Accountability Office (GAO) is of the opinion that “given the diverse nature of the FAA’s activities, a combination of alternative [funding] options may offer the most promise for linking revenues and costs.” In a study released last week, the GAO stated that among the alternatives that the FAA should consider are “user fees.” The GAO
Canada's private, user-fee-based ATC system–Nav Canada–believes that general aviation operators are double-charged for use of Canada's aviation infrastructure and that fuel excise taxes should be reduced.
"Business aviation should support the shift to user fees," urged Reason Foundation director of transportation studies Robert Poole, "if it is part of a comprehensive reform of ATC." He said user fees would enable the costly switch to a "network-centric" (more technology-based) ATC system that in his view would offset increased costs with potential savings from increased flying efficiency and fewer delays.
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.
A letter from the Internal Revenue Service (IRS) can cause any taxpayer’s heart to skip a beat. For aircraft operators, whose main focus of government compliance is the FAA, it can be easy to overlook the many nuances of the federal and state tax codes to ensure all taxes are being paid.
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.
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.