The U.S. House on Thursday passed a $325 billion highway bill that includes an amendment requiring a federal agency to study the diversion of general aviation jet fuel tax proceeds to the federal Highway Trust Fund.
The amendment by U.S. Rep. Mike Pompeo, R-Wichita, and approved Wednesday for inclusion in the highway bill, requires the Government Accountability Office to study the impact of diverting tax revenue collected from the sale of non-commercial jet fuel.
Federal excise taxes on the sale of non-commercial jet fuel to general and business aircraft have been diverted into the highway fund since 2005. That’s when “fuel fraud” law was enacted because of concerns that a 2 1/2 cent per-gallon additional tax on highway diesel fuel would prompt trucking firms to use jet fuel to get around paying the higher tax. The law raised the non-commercial jet fuel tax rate to that of highway diesel, although it did provide for a refund of those taxes if an operator could prove the jet fuel was used for non-commercial aircraft.
But the National Air Transportation Association said there’s no way to collect the refund because the Internal Revenue Service doesn’t provide that mechanism.
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“Thus the Airport and Airways Trust Fund receives no revenue from the majority of general and business aviation jet fuel sales because non-commercial end users are not permitted to apply for the refund themselves,” NATA president Thomas Hendricks said in a statement. “We … hope GAO examines whether fuel additives and diesel engine design changes since 2005 also render the provision nothing more than a bureaucratic roadblock draining the Airport and Airway Trust Fund of revenues needed for airport improvements and the deployment of a modernized air traffic control system.”