Two bills are under consideration for the state of Tennessee (TN)—TN House Bill 1147 and TN Senate Bill 0982. Everyone familiar with these bills seems to have strong feelings one way or the other, and I’m no exception.
Early this week AOPA’s State Advocacy Team sent out an email with the subject—in 24 point bold face type—Save TN Airport Funding TODAY. As explained by AOPA, TN currently imposes a state tax of 4.5% on aviation fuel purchases. If passed, the House and Senate bills will—over a four-year phase-in period—place a cap of $10.5 million on the amount of aviation fuel tax paid by any single user in one year. This would be a huge tax break for business, but would reduce fuel tax funds available to TN airports by nearly 50%. Airports around the state will suffer the consequences. Hereinafter, “AFTC” will mean “aviation fuel tax cap.”
Interestingly, the AFTC will benefit only one giant business: FedEx. It is the only company currently paying more than $10.5 million in aviation fuel tax to the state of TN. FedEx pays some $32 million in such taxes. Let it be noted, BTW, that FedEx is based in Memphis, TN, and the company is a terrific asset for the state. FedEx founder Fred Smith is himself a member of the TN Aviation Hall of Fame.
Like most aviators, I would like to lower aviation taxes as much as possible, but this situation is far from simple.
TN airports are working hard against passage of the AFTC. The income from fuel taxes supports airports. If that money dries up, how will it be replaced? Will locals have to pay higher taxes just to keep their airports?
Many ask if FedEx is making threats, like maybe moving their headquarters out of TN. AOPA says the answer is a simple “No.” FedEx has made no threats. The company has pointed out that some nearby states do have AFTCs which encourages FedEx to purchase as much fuel as possible in those states rather than TN. That’s a reasonable point, not a threat. FedEx is a good citizen.
TN’s House and Senate bills seem to be rushing toward quick passage. In early April, the AFTCs appeared as amendments to less controversial proposed bills—some call it an April Fool joke. I’m told that the Senate bill is on the agenda for the week of April 20, and many expect the House Bill will follow closely. The TN vote may be settled when you read this, but could this type of thing arise in your state next?
BTW, the AOPA State Advocacy Team urged me to contact my State Rep and State Senator. I did, and was told at each office that the office holder would call me back. Neither did. That’s odd because at a recent public meeting they both invited us—their constituents—to call for any reason.
I also called the AOPA’s State Advocacy Team. Paul at that office gave me the info he had and promised to call me right back with additional info. He then did exactly that! As the old saying goes, “Who ya gonna trust?”
It‘s a tough situation. As for me and my house, we oppose the cap.
