Another tax break for U.S. airlines approved!
While other bloggers keep writing about leggings…. U.S. airlines flying to and from Phoenix will soon start paying a little less on jet fuel.
On Thursday, March 23, 2017, Arizona’s Republican governor signed legislation which caps the amount of jet fuel Phoenix is allowed to tax each carrier. The tax break, or subsidy if you will, will cost the city of Phoenix about $2 million a year and largely benefits American Airlines, Southwest Airlines, and the Airlines For America lobbying group.
A Phoenix lobbyist, Barry Aarons, tried unsuccessfully to persuade committee members to stop the tax cut, arguing that losing tax revenue from jet fuel will take away funding from Phoenix Sky Harbor International Airport.
The new law allows Phoenix to keep levying its tax, but only on the first 10 million gallons each airline purchases. While the tax levied by Phoenix is minimal, .007 cents per gallon, it amounts to $3 million a year. The state taxes jet fuel at 3.05 cents per gallon, but it has been limited to the first 10 million gallons that each company purchases for over two decades. According to Mohave Daily News, during the 2015-2016 fiscal year, the state of Arizona collected $4.3 million in jet fuel tax revenue.
Meanwhile, U.S. airlines and Airlines For America have been protesting Gulf carriers over the amount of subsidies they receive from their respective governments.
Hypocrisy? Yes, but this is not uncommon among U.S. airlines, an industry which continues to shrink due to government-backed mergers.
Source: Mohave Daily News