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.

FMI: www.rotor.com