by Dave Weiman
MIDDLETON, WIS. – Taxes and fees on general aviation are often not widely known or understood by pilots, aircraft owners and airport officials. We know they exist, and we have heard that we are paying our fair share for air traffic control services and airport development, but we seldom give them a second thought until we are asked to pay even more!
Once again, the Obama Administration is proposing creating a $100.00 per flight user fee on top of what general aviation is already paying through a federal excise tax on fuel sales. That’s in addition to state and local taxes on fuel sales, maintenance, aircraft registration, and aircraft purchases.
AOPA Great Lakes Regional Manager Bryan Budds was at the Wisconsin Aviation Conference, April 29 thru May 1, 2013 in Middleton, Wisconsin, and provided information on current fees and taxes. Budds also explained why more taxes are not only unjustified, but would be counterproductive to economic development.
First, the $100.00 per flight user fee being proposed by the White House would be cost-prohibitive.
Second, pilots would try to avoid paying such fees by not filing flight plans, and limiting their operations to non-towered airports.
Third, the user fee would require a completely new bureaucracy to collect it that would absorb any anticipated gains in revenue.
Fortunately, any new user fees would require Congressional approval, and Congress has not been receptive to this proposal in the past. The General Aviation Caucus, comprised of 223 members of Congress, has been our stronghold.
In Wisconsin alone, the caucus includes Representatives Ron Kind, Thomas Petri, and Reid Ribble, and Senator Tammy Baldwin. Members of Congress who are not caucus members, but who still oppose user fees, include Wisconsin Representatives James Sensenbrenner and Sean Duffy, and Senator Ron Johnson.
So what federal taxes is general aviation already paying?
Federal taxes on non-commercial (Part 91) 100LL avgas total $0.194/gallon ($0.15/gallon excise tax, $0.043/gallon deficit reduction tax, and a $0.001/gallon LUST (Leaking Underground Storage Tank) tax. Federal taxes on non-commercial jet fuel totals $0.219/gallon ($0.175/gallon excise, $0.043/gallon deficit reduction tax, and $0.001/gallon LUST tax).
In addition, Budds pointed out that states have fees on aircraft registration, their own fuel taxes, and sales taxes on aircraft purchases, parts, and aircraft maintenance. Fortunately for general aviation, more states are excluding sales tax on aircraft parts and labor on maintenance because they realize that this affects where businesses are located, where they base their aircraft, and where aircraft are serviced.
Currently, some 30 states exclude sales tax on parts and labor. In the Midwest, Indiana just passed the sales tax exclusion law, and Minnesota is working on doing the same.
Annual Aircraft Registration Fees
In Wisconsin, annual registration fees for aircraft weighing less than 3,000 lbs is $75.00 per year, invoiced biennially. For instance, the registration fee for a Cessna 182 is $75.00, King Air 250 – $940.00, Citation III – $1,125.00, and Gulfstream 550 – $2,500.00.
In Minnesota, annual registration is “valued based” – 1%, decreasing to .25% for older aircraft. The average registration fee for a Cessna 182 is $3980.00, King Air 250 – $60,000.00, Citation III – $80,500.00, and Gulfstream 550 – $550,000.00.
In Illinois, annual registration is $10.00, regardless of the size or age of the aircraft.
A One-Time Sales Tax On Aircraft Purchases
In Wisconsin, the sales tax on a new Cessna 182 is $24,278.00, King Air 250 – $366,000.00, Citation III – $491,050.00, and Gulfstream 550 – $3,355,000.00.
In Minnesota, the sales tax on a new Cessna 182 is $30,984.00, King Air 250 – $467,100.00, Citation III – $626,692.00, and Gulfstream 550 – $4,281,750.00.
In Illinois, the sales tax on a new Cessna 182 is $40,795.00, King Air 250 – $615,000.00, Citation III – $825,125.00, and Gulfstream 550 – $5,637,500.00.
Fuel Taxes
Wisconsin has no sales tax on either jet fuel or 100LL, but does have a $.06 per gallon excise tax on both fuels. The average fuel tax paid annually by a Cessna 182 is $234.00, King Air 250 – $2,070.00, Citation III – $4,950.00, and Gulfstream 550 – $6,300.00.
Minnesota has no sales tax on either jet fuel or 100LL, but a $.05 per gallon excise tax on both. The average fuel tax paid annually by a Cessna 182 is $195.00, King Air 250 – $1,725.00, Citation III – $4,125.00, and Gulfstream 550 – $5,250.00.
Illinois has a 6% sales tax, plus a $.003 excise tax on both jet fuel and 100LL. The average fuel tax paid annually by a Cessna 182 is $1,415.00, King Air 250 – $12,523.00, Citation III – $29,948.00, and Gulfstream 550 – $38,115.00.
Fees and taxes are either a deterrent or an attraction for based aircraft and businesses within states. Based aircraft will increase aviation activity, and the businesses that own them will contribute to a state’s economy.
Budds concluded his presentation by describing the efforts of AOPA relative to government affairs.
He noted that regional managers like himself work on state and local advocacy, engage the membership, keep tabs on airport issues, and work with state legislatures to support general aviation.
There are 29 staff persons and four (4) departments within the AOPA Government Affairs Division – Operations and International Affairs, Legislative Affairs, Regulatory Affairs, and Airport and State Advocacy, which houses the Airport Support Network (ASN) team. It is their job to promote, protect, and defend general aviation interests across the country from the halls of Congress to the federal regulatory agencies like the FAA and Transportation Security Administration, and in state capitols, county courthouses, city halls, and at your local airport.
ASN is at the heart of AOPA’s efforts to protect local GA airports and involves more than 2,500 volunteers nationwide. ASN is AOPA’s early warning system.
For additional information or assistance, contact Bryan Budds at Bryan.budds@aopa.org (301-695-2095).
