WASHINGTON, D.C. — In a letter to the leadership of the New Jersey State Senate and General Assembly, National Air Transportation Association (NATA) President and CEO Thomas L. Hendricks asked state lawmakers to oppose a proposed increase in state aviation fuel taxes, stating the proposal “will likely not have the intended effect of raising revenue, but rather reduce investment and good paying jobs in New Jersey.”
Legislation is under active consideration in the New Jersey Legislature that will raise the state tax on avgas and jet fuel from its current 2¾% to 7%, then index it annually to inflation.
NATA represents 39 member companies in New Jersey, part of a state general aviation infrastructure that represents 16,200 jobs in New Jersey with a contribution to state GDP of $1.78 billion.
“The legislation fails to recognize the unique nature of aviation, which allows stakeholders to simply fly to the state that affords the best value,” Hendricks explained to lawmakers. “In fact, these proposals are outside of what NATA sees nationally, where states are adopting tax statutes to make their aviation businesses more, not less, competitive with those in adjoining states.”
Hendricks cited a recent example in New York where, in response to tax levels in adjoining states, the New York state legislature approved a sales and use tax exemption effective Sept. 1, 2015, on the sale of general aviation aircraft and for machinery or equipment to be installed on general aviation aircraft.
Hendricks closed the letter reminding state lawmakers that “revenues derived from state aviation fuel taxes may only be used for aeronautical purposes. In 2014, the FAA reaffirmed this long-standing policy, noting that state taxes on aviation fuel are subject to use either for a state aviation program or for airport-related purposes.”