NATA Takes on the IRS, to Little Avail

April 14, 2006
Last year, as part of the Highway Bill, Congress decided that jet fuel should be taxed at the highway diesel fuel rate (24.4 cents/gallon) and not the historic jet-A rate (21.9 cents/gallon). There was a concern that commercial operators were siphoning off the cheaper jet-A for use in diesel-related operations. Problem is, that extra three cents/gallon or so adds up, and it is adding up in the Highway Trust Fund coffers and not that of the Aviation Trust Fund. The intent by Congress was for the Internal Revenue Service to create a reasonable system by which the people stuck in the middle of all of this the fixed base operators/fuel providers could help facilitate refunds for non-commercial users (their customers). Well, the National Air Transportation Association, at center point on this issue, reports that IRS has only served to confuse the issue. The two primary concerns are that money is being diverted from the Aviation Trust Fund and that non-commercial users are simply being charged the extra tax  and paying it. FBOs that have tried to go through the IRS approved vendor process report frustration and a friendly visit from the IRS. The other concern has to be how this ever got this far. Seems a perfect example of how not to legislate. Thanks for reading.