Highway Bill Contains Aviation Tax Provision

AINalerts » June 30, 2005
April 18, 2007, 10:49 AM

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. Buyers of jet fuel would then have to submit a claim to the Internal Revenue Service to receive the difference between the 24.4 cents per gallon paid and the 21.8 cents per gallon actually owed. If enacted, this provision would have an “extremely adverse affect on the general aviation industry, particularly Part 91 operators,” NATA said. “This proposal would force all purchasers of jet fuel to fill out large amounts of paperwork to claim the refund on the tax they have paid. If any fuel receipts, or other paperwork, is lost before submitting a claim, an operator will be unable to recover any of the difference applicable to them.” This change was added to the bill because of reports of highway truck operators who allegedly buy jet fuel and then mix in additives to create useable truck fuel. By purchasing jet fuel and altering it for highway use, the Highway Trust Fund loses these tax revenues to the Aviation Trust Fund.

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