Legislation Affects Bizav Deductions and Fuel Tax

AINalerts » May 26, 2005
July 23, 2007, 11:05 AM

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. The first provision would expand the limitation on the deductibility of business expenses for entertainment use of employer-provided aircraft to “all” employees. The second provision would change procedures for paying the fuel tax on jet fuel. If an airport is not served by a direct pipeline and is considered “secure” from fuel being diverted to pay for highway improvements, “the fuel delivered to an airport will be sold inclusive of tax at 24.4 cents per gallon,” NBAA said. “Then, the entity that purchases the fuel at the airport (usually an FBO), and actually delivers fuel to an aircraft, can claim a refund for the difference between [the highway tax of] 24.4 cents and [the jet fuel tax of] 21.8 cents per gallon.” NBAA opposes both provisions.

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