A4A Applauds Move Eliminating The Four Percent Tax

Georgia Governor Nathan Deal has issued an executive order suspending collection of the state’s 4 percent sales and use tax on jet fuel, effective Aug. 1. In FY 2018, the state sales tax on jet fuel amounted to more than $39 million in revenue.

“Georgia imposes the fourth-highest fuel tax burden among states with major airport hubs, putting us at a daily disadvantage behind North Carolina, Texas, Florida and New York, among others. In fact, Georgia’s tax burden ranks only behind high-tax states California, Illinois and Michigan,” said Deal. “The annual economic impact of Georgia airports amounts to over $62 billion per year, and direct flights out of Hartsfield-Jackson Atlanta International Airport support nearly $11 billion in foreign investment and 42,000 jobs across the state.

“During the past eight years, we’ve taken similar steps to boost industries and economic growth around the state. In 2012, for example, we eliminated the energy sales tax on manufacturers. As a result, in the past five years, we’ve seen manufacturing jobs grow by 12.5 percent to a total of 395,807 in 2017. Just as removal of this tax burden spurred growth in the manufacturing arena, so will removal of the jet fuel tax burden in the airline industry.

“In order to remain the No. 1 state in which to do business, attract more companies to our communities and provide more jobs for our growing population, it is crucial to maintain and preserve a pro-business climate. Providing tax relief to job creators will help us maintain our competitive advantage as a global hub for commerce now and in the future.”

"We applaud Governor Deal's decision to issue an executive order that encourages the airline industry to continue to invest in the state's future, leading to new and diverse flight options, lower fares, and greater opportunities for job growth at the world's busiest airport," said A4A President and CEO Nicholas E. Calio. "These improvements will benefit everyone who flies."

Carriers continue to invest more into improving their product and customer experience than ever before, yet they must examine market forces such as consumer demand and the state's tax burden before making these decisions. The executive order places Georgia among the increasing number of states that are making competitive decisions to lower jet fuel taxes in favor of growth, including North Carolina, Florida, and Arizona. For example, in the year following the elimination of jet fuel tax in North Carolina in 2015, flights in and out of the state grew four percent and travelers were able to take advantage of 31 new routes from a wide range of carriers.

Airlines also continue to collaborate with their airport partners to make critical investments in airport modernization. In the last decade, more than $11 billion in capital projects have been completed, are underway or approved to improve and expand the airport infrastructure in Atlanta, and this partnership will continue.

Previously, Georgia ranked eighth on the list of states with the most burdensome tax on commercial jet fuel, one of the largest expenses for the aviation industry. The state will now be competitive with other states without such taxes, including Texas, Ohio, and Delaware.

(Source: Governor Deal and A4A news releases)

FMI: Executive Order, www.airlines.org