FAA ISSUES FINAL POLICY ON AVIATION FUEL TAX REVENUE
December 18, 2014
On November 21, 2013, the Federal Aviation Administration (FAA) published a proposed amendment to its Revenue Use policy which in part addressed the use of revenue from taxes on aviation fuel imposed after December 30, 1987. Airports Council International North America (ACI-NA) filed comments on the proposed amendment, which were taken into account by the drafters of the final Revenue Use policy.
The Administration’s final policy states that proceeds from state or local taxes on aviation fuel must be used for airport-related purposes. The policy affects those airport operators that have accepted Federal assistance and any state and local governments that impose taxes on aviation fuel. Some key issues of the policy are:
- State or local taxes on aviation fuel imposed after December 30, 1987 are subject to revenue use requirements. Revenues from a State tax on aviation fuel may be used to support a State aviation program, and airport revenues may be used on or off the airport for noise mitigation; and
- Based on a comment by ACI-NA that it would be unfair to penalize airport sponsors for misuse of revenues from taxes imposed and used by another entity, the FAA has revised the policy to recognize the difference between taxes controlled by the airport sponsor and those that are not, for compliance purposes.
The Federal notice regarding the final policy is available at the following link: https://www.gpo.gov/fdsys/pkg/FR-2014-11-07/pdf/2014-26408.pdf.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com, 202-659-6622) or Drew Derco (dderco@eckertseamans.com, 202-659-6665).