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US Senate Approves Airport Tax Extensions

by Mike Godfrey, Tax-News.com, Washington

21 April 2016


On April 19, the US Senate passed a bipartisan bill that, if subsequently approved by the House of Representatives, will extend the key revenue provisions supporting the Airport and Airway Trust Fund (AATF) until end-September 2017.

Current legislation, approved by the US Congress in March this year, extended authorization of Federal Aviation Administration airport programs and the accompanying tax revenue provisions only on a short-term basis until July 15, 2016.

AATF revenue measures include ticket taxes, such as the domestic passenger ticket tax (7.5 percent on the purchase price of passenger tickets), the domestic flight segment tax (USD4 per passenger per domestic flight segment), and the international arrival and departure tax (USD17.80 per international flight, or USD8.90 per flight between the United States and Alaska or Hawaii). The excise tax on commercial aviation jet fuel would also be extended.

The move to extend AATF funding had been delayed in the Senate by moves from some lawmakers to add to the bill various renewable energy tax breaks that had been "forgotten" when the tax extenders legislation was passed in December last year. Those attempts failed.

In a recent speech, Senate Finance Committee Chairman Orrin Hatch (R – Utah) stressed that "a clean extension of the FAA taxes – like the one before us – is probably the best approach. My main priority in developing this legislation was to ensure adequate funding for the FAA and airway projects and programs throughout the country, and to do so in a fiscally responsible manner."

The new bill – the Federal Aviation Administration Reauthorization Act of 2016 – was approved in the Senate by an overwhelming 95-3 vote. However, its passage through the House of Representatives may be more troubled, as Republicans there have been considering a sweeping overhaul of the FAA, including privatization of its air traffic control into a not-for-profit corporation.

TAGS: tax | air passenger duty (APD) | energy | law | aviation | excise duty | legislation | United States | tax breaks

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