The National Business Aviation Association (NBAA) has responded to a new US government report regarding a so-called ‘fuel fraud’ provision on aviation taxes, describing the current system as ‘fundamentally flawed”.
The report, published in early August by the US Government Accountability Office (GAO), determines that as a result of the provision, between US$1bn and US$2bn has been improperly held back from the Airport & Airway Trust Fund (AATF).
In place for more than 10 years, the provision automatically diverts a portion of excise taxes on turbine aircraft fuel to the Highway Trust Fund to address the commercial truck operators that many believe are avoiding the payment of taxes on diesel by purchasing turbine aircraft fuel for use in their road vehicles. Fuel vendors need to voluntarily file for credits, which the NBAA believes to be an over-complicated process, with few incentives.
NBAA chief operating officer Steve Brown said, “After an extensive and unbiased investigative process, the GAO’s findings validate our belief that the current system is fundamentally flawed, and not structurally aligned with the intent of either the highway or aviation trust funds.
“With the facts from this report now in hand, our hope is that Congress will correct this issue in a future transportation bill that properly routes all turbine fuel excise tax revenues to the aviation trust fund.”
