FAA Authorization Ends Tonight - Federal Excise Taxes Set To Expire

Because Congress did not approve an extension today, the FAA's authorization will expire at midnight. This will impact both availability of certain FAA services and the collection of taxes that are deposited in the Airport and Airway Trust Fund.  Those funds are used to pay some FAA operating expenses as well as airport improvement programs.

The taxes will not be reinstated until Congress acts to reauthorize the FAA in either a short-term extension or a long-term reauthorization bill.

Essential FAA services, such as Air Traffic Control, will continue uninterrupted.  The FAA will inform employees whether their job requires them to continue working during the lapse in funding authorization.  Employees whose salary is funded by trust fund revenues will be furloughed.  NATA expects the FAA to announce the status of various offices and employees soon.  FAA announcements should be posted to www.faa.gov.

The Senate has adjourned for the weekend so it will be at least Monday afternoon before any action to reauthorize the FAA can occur.

Transportation Taxes
Beginning at 12:01 a.m. on Saturday, July 23, 2011, the following taxes should not be collected for transportation that occurs during the lapse in FAA authorization:

• 7.5% excise tax
• Segment fees
• International Facilities Fee
• Alaska/Hawaii Fees
• 6.25% cargo tax

Fuel Taxes
Fuel currently in FBO tanks or in aircraft has already been taxed.  FBOs need not alter their pricing for fuel they currently hold.  FBOs receiving new fuel deliveries should remain aware of whether the fuel has been taxed, especially if the expiration of taxes continues for a longer period of time.
Commercial operators eligible for a refund or credit for fuel used for commercial purposes will remain eligible for those refunds when they purchase fuel that was taxed.
 
NATA has reached out to the Internal Revenue Service for more information on how FBOs and operators should handle specific tax situations and will update the membership as more details become available.

For general press inquiries, contact Shannon Chambers at 703-298-1347 or schambers@nata.aero. 

The National Air Transportation Association (NATA) has been the voice of aviation business for more than 80 years. Representing nearly 3,700 aviation businesses, NATA’s member companies provide a broad range of services to general aviation, the airlines and the military and NATA serves as the public policy group representing the interests of aviation businesses before Congress and the federal agencies.