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Lawmakers extend aviation taxes for 15 months

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Tax Hot Topics - Lawmakers extend aviation taxes for 15 monthsPresident Obama has signed a bill reauthorizing the Federal Aviation Administration (FAA) and extending aviation taxes for 15 months.

Aviation taxes had been scheduled to expire on July 15. The FAA Extension, Safety, and Security Act of 2016 now extends the following taxes through the end of September 2017:
  • 19.3-cents-per-gallon excise tax rate on noncommercial aviation gasoline
  • 21.8-cents-per-gallon excise tax rate on noncommercial aviation kerosene
  • 7.5% tax on the base ticket price $4.00-per-person domestic segment tax for a single takeoff and landing (indexed for inflation)
  • $4.00-per-person domestic segment tax for a single takeoff and landing (indexed for inflation)
  • $17.80-per-person international travel facilities tax for flights that begin or end in the United States ($8.90 for a flight that begins or ends in Alaska or Hawaii) (indexed for inflation)
  • 6.25% tax on the amount paid for transporting property by air

House Republicans had originally proposed to replace the taxes with user fees and scrap the FAA in favor of a nonprofit corporation. Senate Democrats made an effort to use the FAA bill as a vehicle to extend the renewable credits under Section 48 that were not included as part of the December 2015 tax bill. Both efforts failed. The FAA bill may be the last tax bill of the term, so it will be difficult for proponents of other tax extensions to find a legislative vehicle.

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