NATA: Stop Highway Robbery of Aviation Taxes
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. “This diversion of aviation fuel tax revenue has cost the Airport and Airway Trust Fund approximately $50 million annually since the bill’s enactment and is anticipated to cost another $500 million over the next 10 years,” NATA said. “In addition, the process of filing for the 2.5-cent-per-gallon refund with the IRS has put an undue burden on aviation businesses although there is no substantial evidence to prove that fuel fraud is taking place.” The nonprofit Taxpayers for Common Sense, which bills itself as a “nonpartisan budget watchdog,” also addressed this diversion of aircraft fuel taxes in a recent report on the aviation trust fund. “Congress could fix problems with the tax collection mechanism by mandating that the IRS perform inspections of fuel vendors or shifting the refund process to aviation fuel wholesalers,” it said.