Bizav Groups Laud Action To Shelve New Tax Rules

AINalerts » October 4, 2005
February 16, 2007, 5:40 AM

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. Treasury Secretary John Snow urging suspension of the new rules, which would raise the tax rate on jet fuel to that of costlier highway diesel fuel, but allow aviation jet fuel buyers to apply for a refund for the difference between the highway rate and the jet fuel rate. The new provisions would also require that all jet fuel taxes collected at the higher rate first go into the Highway Trust Fund. From there, they would go into the Airport and Airway Trust Fund, but only after the purchaser applies for a credit. According to the three business aviation groups, the rules would create an unwieldy and costly administrative burden for their members and effectively result in a tax increase and possibly a revenue shortfall for the Airport and Airway Trust Fund.

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