Senator Murkowski Has A Plan
US Sen. Lisa Murkowski (R-AK) on Wednesday introduced two
provisions to repeal a rural airplane ticket tax that has been
discriminatory to rural Alaskans for several years and a similar
ticket tax on floatplane passengers.
Murkowski, who last year won approval of the two provision as
part of the Senate-approved version of the Safe, Accountable,
Flexible and Efficient Transportation Equity Act of 2003 (SAFETEA),
reintroduced the measures today as her third and fourth bills of
the 109th Congress in hopes that the reintroduction will speed
efforts to win passage of the measures this year.
"For several years rural Alaskans have been unfairly burdened by
having to pay airline ticket segment taxes on their flights into
hub airports from rural communities. The tax is patently unfair to
rural Alaskans since there is no other way for them to get to and
from their villages to buy supplies or seek medical care other than
by air. This is another attempt to end this discrimination," said
Senator Murkowski, who was joined in sponsoring both bills by Sen.
Ted Stevens.
The first amendment reduces the number of Alaskans who have to
pay the segment tax for air travel to rural airports. Under current
law, passengers nationwide are exempt from paying the now $3.20
"segment" tax if the airports they travel to have less than 100,000
passenger enplanements a year and are located 75 miles from the
nearest airport that has over 100,000 enplanements a year. Airports
receiving the Essential Air Service subsidy are also exempt.
But in rural Alaska where there are no roads that lead to
villages closer than 75 miles apart, villagers end up paying the
fee because of a technical glitch that still needs to be corrected.
"While the segment fee was intended to cover increased security
costs for airports handling large aircraft and international
flights, the provision is a significant problem in my State," said
Murkowski today in reintroducing the repeal proposals. The
Murkowski amendment adds an exemption for airports "not connected
by paved road to another airport" from having to impose the segment
tax. "While 75 miles is not really a long way to drive to and from
an airport, unfortunately the law assumes there is a road to drive
on. And in Alaska that is not always the case. When there are no
roads passengers can not choose to drive to the larger airports,"
she said. The amendment protects Alaskans from having to pay the
tax when there is no transportation alternative within a 75 mile
radius.
The second amendment also exempts seaplane passengers, those who
fly on floatplanes to numerous small communities in Alaska, from
paying the 7.5 percent ticket tax on scheduled floatplane service
on top of the segment fee. Floatplane charters currently already
are exempt from the tax.
"In nearly all cases floatplanes fly at low altitudes, and never
enter controlled airspace, so they are not tracked by FAA
personnel, don't utilize airport facilities and almost never incur
costs to the government for maintaining airport facilities. There
just is no reason why passengers have to pay the extra tax," said
Murkowski, noting there are a number of seaplane operators in both
Alaska and Washington State that never frequent airports that have
benefited from federal Airport Improvement Program (AIP) funds -
the original justification for the tax being levied.
The rural segment tax exemption would save Alaskans about $2
million a year by revised estimates, while the floatplane tax
elimination would save under $1 million a year, according to the
Congressional Joint Tax Committee. Murkowski said the changes would
not have a significant impact on the federal treasury, especially
since floatplane operators will be paying higher federal fuel taxes
this year for aviation gasoline, but would have a huge impact on
rural Alaskans.
"Over the course of a year a villager may have to fly into
Bethel, or Juneau or Ketchikan on dozens of occasions for spare
parts or for doctor visits. Such a passenger on a 70-mile trip is
not taxing the nation's aviation system nearly as much as a cross
country vacationer flying from New York to Los Angeles, nor do they
have an alternative way of getting there. They shouldn't be charged
the same," she said.
The bill now heads to the Senate Finance Committee for its
consideration.