Provision Added By GA Senator Johnny Isakson (R-GA) To Crack Down On Tax Exemptions For Foreign Carriers

U.S. Senator Johnny Isakson (R-GA) has introduced a provision to be included in the Senate version of a tax reform bill that would target a trio of Persian Gulf Airlines. Georgia is the home of the corporate headquarters of Delta Airlines, which has for years lobbied the U.S. government to revise income tax exemptions afforded to some of its competitors.

The Atlanta Journal Constitution reports that the Isakson amendment appears to specifically target Etihad, Emirates and Qatar Airways. Delta, along with legacy carriers United and American Airlines, say that the Persian Gulf airlines are unfairly subsidized by their wealthy governments, which violates the spirit of some international trade agreements. The subsidies total more than $40 billion, the airlines say, giving them an unfair advantage on ticket prices in some fast-growing markets.

Isakson, a member of the Senate Finance Committee where tax laws are written. “Foreign airlines should not receive preferential tax treatment if their countries choose not to open their markets to U.S. companies,” Isakson said. “Tax reform is all about leveling the playing field for Americans and our businesses.”

If the Isakson amendment is approved with the tax package, foreign airlines would be required to pay American corporate tax rates if they do not have a tax treaty with the U.S., and U.S. carriers do not fly to their home countries at least twice per week. Emirates, Etihad and Qatar do not currently pay U.S. corporate taxes.

The amendment would force foreign carriers to pay about $200 million in additional taxes over the next ten years. Delta declined to comment for the story.

(Image from file)

FMI: Original Report