Fri, May 27, 2005
The HAI tells ANN that
they have learned that the recently passed Senate version of the
Highway Bill contains an amendment that would change procedures for
paying the fuel tax on jet fuel. The basis for this amendment is
derived from an IRS contention that jet fuel is being diverted to
highway use.
The provision contained in the Senate Highway Bill proposes
that, if an airport is not served by a direct pipeline and is
considered “secure” from fuel diversion, the fuel
delivered to an airport will be sold inclusive of tax at 24.4 cents
per gallon. 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 24.4 cents and 21.8 cents
per gallon. Legislative language in the bill proposes that
approximately 50 airports will qualify as “secure” fuel
locations.
The amendment appears to impose the refund obligation on
the registered purchaser of the fuel, not on the operator of the
aircraft, unless the fuel is purchased directly by an
operator.
The House-passed version of the Highway Bill does not contain
this provision. A joint House-Senate Conference Committee will
convene after the Memorial Day Recess to iron out the differences
between the competing measures. HAI strongly opposes the fuel tax
on jet fuel provision contained in the Senate-passed bill and
strongly encourages all HAI members to contact their elected
Members of Congress to voice their opposition to any legislation
containing such an amendment.
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