Air Travel Tax Row Escalates In Washington

by Mike Godfrey, for LawAndTax-News.com, New York

16 May 2007

US Administration budget proposals to re-allocate the costs of running air traffic control to favour big airlines have run into a storm of protest from General Aviation operators and have spawned alternative bills in both houses of Congress.

The budget proposals, issued in February, would abolish the ticket tax currently imposed on fare-paying passengers, replacing it with a user fee to be paid by the airlines, but reducing the overall contribution of commercial aviation by nearly US$2bn.

To replace the lost cash, turbine-powered aircraft would pay a US$25 'Air Traffic Modernization Surcharge' per flight user fee, and fuel taxes for private operators would be sharply increased by more than 250%.

AOPA (The Aircraft Owners and Pilots Association) is predictably up in arms, and has given a cautious welcome to a Senate alternative to the FAA budget proposals. AOPA President Phil Boyer told members of the Senate Commerce Committee in a May 10 letter that the Aviation Investment and Modernization Act of 2007 (Senate Bill 1300), did address many AOPA members' concerns. "With that said, AOPA remains very concerned about the precedent-setting introduction of user fees and the impact on our members who fly turbine-engine aircraft," said the letter. "Even though piston-engine aircraft would be exempt from the charge, the majority of AOPA members are opposed to the surcharge, believing that once a user fee or surcharge is introduced, it is only a matter of time before it will apply to them." Under the Senate's bill, there would be no increase in taxes on aviation gasoline. The Senate Commerce Committee is due to vote on the bill this week.

The commercial operators of course claim that they have been unfairly subsidizing general aviation. James May, president of the Air Transport Association says: "Our passengers should not be forced to continue to subsidize corporate aircraft."

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