Currently, Georgia has the fourth highest fuel tax burden among 21 states with large hub airports. The largest economic driver in Georgia happens to be Hartsfield-Jackson International Airport – with a yearly impact of $58 billion. Fuel is the airlines’ second biggest cost behind labor. Most states with an airport the size of Hartsfield have a tax of one cent or less per gallon (neighboring state North Carolina does not have a tax). A new measure proposed in House Bill 821 would remove almost all taxes on jet fuel.
Georgia is only behind Illinois, California and Michigan on the jet fuel tax burden. North Carolina and Texas are at zero. North Carolina saw jet traffic increase by 4% following its elimination of the tax and Georgia hopes see the same.
Sponsored by Rep. Chuck Efstration (R- 104 Dacula), who also happens to be the governor’s floor leader, the bill would limit the taxing of jet fuel in almost all cases – including regular sales taxes and various SPLOST taxes. The only taxes on jet fuel that would remain are the Joint County and Municipal Sales and Use Tax (LOST) and the Metropolitan Atlanta Rapid Transit Authority Act of 1965. Both of those were put in place before 1987, which is the splitting point of federal law that requires jet fuel sales tax to only be used on existing airports. If those taxes are spent elsewhere, it jeopardizes federal funding of the airport. Those crazy canopies at Hartsfield had to come from something.
Clayton County is currently in the midst of an appeal regarding that federal rule, which went into effect late last year – arguing that the loss of nearly $20 million in revenue from jet sales taxes is too great a burden.
Other sponsors of the bill include other governor floor leaders, Rep. Trey Rhodes (R- 120 Greensboro) and Rep. Terry Rogers (R- 10 Clarkesville), Chairman of the House Ways and Means Committee Rep. Jay Powell (R- 171 Camilla) and also Rep. Bruce Williamson (R- 115 Monroe) – who happens to be the Majority Caucus Secretary/Treasurer.
It’s safe to say the governor wants this one to go through. The issue is seen as critical enough for Governor Deal to issue a statement focused on the issue.
“I’ve listened to Lt. Gov. Cagle, Speaker Ralston and members of the General Assembly regarding changes to Georgia’s tax code,” said Deal. “In light of those discussions, I am proposing adjustments to HB 821, which updates the Internal Revenue Code (IRC). I’m moving ahead with IRC legislation for 2017, which provides tax relief for Georgians by conforming to federal tax regulations. It will also help our state be more competitive by eliminating the sales tax on jet fuel, which will encourage airlines to fly additional direct flights from Georgia to destinations around the globe. Georgia and our businesses are global competitors, we need direct air travel to provide our companies with immediate access worldwide. By removing the sales tax on jet fuel, we can level the playing field for our airports and airlines to compete.”
