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N.C. Approves Budget with American Airlines Fuel Tax Exemptions

ByJonathan

American Airlines Fuel Tax Exemptions

N.C. Approves Budget with American Airlines Fuel Tax Exemptions

American Airlines is one step closer to keeping the fuel tax exemptions that on Wednesday, put the airline on “high alert” by the city of Charlotte, North Carolina with the possibility that an amendment would be filed in the North Carolina General Assembly to end the tax exemption.

Some local reports suggest that the fear of the tax exemptions being taken away stemmed from Americans vocal opposition to HB2, recent legislation that became law in North Carolina that sparked national outrage over the issue of transgender bathroom usage.

According to the Charlotte Observer:

American is a major employer in Charlotte, which is its second-busiest hub behind Dallas/Fort Worth. The company operates about 650 flights a day from Charlotte Douglas International Airport – more than 90 percent of the airport’s total – and employs 11,000 people based at the city. Statewide, American employs 14,000.

The company took an early stand against HB2, which among other measures limits legal protections for LGBT individuals. The law was passed in response to a Charlotte ordinance that would have expanded anti-discrimination protections and allowed transgender individuals to use the bathroom of the gender with which they identify.

In March, American put out a statement that said HB2 is discriminatory: “Laws that allow such discrimination go against our fundamental belief of equality and are bad for the economies of the states in which they are enacted.

The exemption is a big deal for American Airlines.  According to www.12billion.org, an organization that tracks the fuel breaks for airlines, the cost to North Carolina taxpayers to US Airways has amounted to over $58 million.  Each year, airlines in North Carolina get $37 million in tax breaks, which is particularly important to American Airlines since it’s merger with US Airways.  In North Carolina under the exemption, airlines are only required to pay tax on fuel used within the state.  Additionally, there is a cap on the amount of jet fuel sales tax paid by airlines.
American Airlines is not out of the woods yet.  The Senate is still set to take up the budget next week.  Although there currently aren’t any reports on a possible Amendment in the Senate, there is a strong likelihood American is still worried about the passage of this significant benefit to their wallet.

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4 Comments

  1. Pingback: American Airlines Fuel Subsidies May Be Safe For Now - View from the Wing

  2. American Airlines had $9.4 Billion in revenue in 1 Q 2016 and earned $1.2 Billion before chargeoffs. 1.2 Billion. in 90 days. please explain to me why American Airlines doesn’t have to pay tax on fuel in North Carolina again?

  3. So, let’s say they do lose their tax break. It’d be fair to imagine that they’d have to increase ticket costs for those who fly. That would put the burden on those who fly, rather than everyone. From a broad perspective, it does seem like there’s better ways to spend taxpayer money.

  4. Where does Jennifer Roberts Charlotte Mayor stand? She probably supports this corporation.

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