Jet Fuel Taxes Being Deposited In Highway Trust Fund
The presidents of eight aviation trade associations have sent a
letter to the chairmen and ranking members of the U.S. House of
Representatives aviation and highway subcommittees on Feb. 10,
urging them to repeal the “fuel fraud” provision that
was introduced in the 2005 surface transportation act which adds
money to the Highway Trust Fund at the expense of the Airport and
Airway Trust Fund (AATF).
The fuel fraud provision changed the collection of taxes for
non-commercial 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 AATF approximately $50 million
annually since the bill’s enactment and is anticipated to
cost another $500 million over the next ten years.
While fuel vendors can apply for a refund of the tax, the
burdensome 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.
“When these fuel vendors forgo the refund process, due to its
administrative burden, the aviation trust fund receives no revenue
from the taxes collected on the sale of that aviation jet fuel
because non-commercial end users are not permitted to apply for the
refund themselves,” the presidents said in their letter.
The trade groups signing the letter included:
AEA
AOPA
HAI
NATA
NBAA
Alliance of Aviation Across America (AAAA)
National Association of State Aviation Officials(NASAO)
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