By Jay Heflin
FAA legislation being debated in the Senate looks to provide approximately $276 million in additional funds to modernize the U.S. air-traffic system by upping taxes on several areas within the airline industry.
This bill sets the general aviation jet fuel tax at a rate of 36¢ per gallon, increasing it from the current rate of 21.9¢/gallon, and is estimated to raise approximately $113 million through 2014.
It also slaps private business jet charters with an increase on gas taxes, from 4.4 cents per gallon to 36 cents, as well as a 14-cent surtax on fuel, according to documents released by the Senate. The provision is expected to raise $107 million through 2014.
Charter airlines like the beleaguered NetJets will likely absorb this tax increase. The company is owned by Berkshire Hathaway and caters to high-end travelers by offering them fractional ownership in private plans. The airline is loaded with debt, but is expanding, according to Fortune magazine. An increased gas tax will only add challenges to bringing the company back into the black.
The bill includes a provision for aircraft weighing 6,000 pounds to pay into the Airport and Airway Trust Fund. These planes were originally exempt. Now, only sightseeing planes are exempt. The provision is expected to raise $56 million over ten years.
The Senate could complete action on the bill this week.
http://thehill.com/blogs/on-the-money/domestic-taxes/86161-extra-276m-sought-in-senate-faa-bill
Source: THE HILL
Date: 2010-03-11