A tax change on aviation fuel has taken money from the national air traffic infrastructure and put it into the highway funds not to mention that it raised the taxes on an already burdened aviation industry. Conrad Burns, the Republican Senator from Montana is looking to remove this tax until 2007 when the tax is supposed to expire so that it can be studied. This is a very wise move.
The current rule, enacted last year, has raised the cost of business aviation only slightly. But it has irritated general aviation fuel vendors while directing millions of dollars to the highway trust fund that had previously gone to fund aviation infrastructure and operations.
Burns’ bill would suspend the rule until Sept. 30, 2007, when all aviation taxes will expire and need to be reauthorized. Proponents of the measure say the time is needed to study how difficult compliance with the rule change has been for fuel vendors and to further investigate the issue that prompted it.
The rule, which took effect October 2005, was created in response to reports of truck operators buying aviation fuel to fraudulently avoid the higher fuel tax rate, 24.4 cents per gallon compared with 21.9 cents per gallon. Organizations that fought the rule disagree that such fraud is widespread, saying they have yet to see statistical evidence of trucks filling up on aviation fuel. via The Business Journal of Jacksonville:.