Under changes recently enacted in Congress, the Internal Revenue Service can collect an additional 24.4 cents per gallon in taxes on Jet A aviation fuel, apparently due to concerns that highway operators are avoiding taxes on diesel fuel by buying Jet A to burn in their trucks. Thus, aviation users, unless they are buying the fuel under certain circumstances that are not yet clearly defined, must also pay the extra 24.4 cents and then apply for a refund. If it seems a bit like guilty till proven innocent, well, the National Air Transportation Association (NATA) and National Business Aviation Association (NBAA) don’t like it either. They’ve asked the IRS to delay implementing the tax changes until the whole process is clearly explained. Meanwhile, NBAA and NATA have formed a working group along with the General Aviation Manufacturers Association, tax experts, FBOs, air-charter operators and private aircraft owner-operators to work on strategies to mitigate the effects of the change. According to NATA, the authors of this provision believed that a significant amount of aviation fuel is being fraudulently diverted to highway truck use, but there is little evidence of such diversion. The new rules are due to take effect Oct. 1.
NATA, NBAA Ask For Mercy From IRS On Fuel Tax
Key Takeaways:
- The IRS will impose an additional 24.4 cents per gallon tax on Jet A aviation fuel, effective Oct. 1, due to concerns about its fraudulent use in highway trucks to avoid diesel taxes.
- Aviation users must initially pay this extra tax and then apply for a refund, a process criticized by industry groups as "guilty until proven innocent" and currently lacking clear guidelines.
- Major aviation organizations, including NATA and NBAA, are opposing the new tax, requesting a delay from the IRS and forming a working group to mitigate its financial impact given the lack of clear evidence for widespread fraud.
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