A new FAA policy confirms that revenues from aviation fuel taxes must be dedicated to aviation use. The policy, which takes effect on Monday, formally adopts a 1987 interpretation calling for airport operators or state governments seeking Airport Improvement Program grants to ensure that state and local aviation fuel taxes would be used for either aviation programs, airport capital projects and/or airport operating costs.
Most airport operators and governments have followed the interpretation, but periodically some challenge it, citing ambiguity in the language, according to NBAA. The updated policy protects against hidden taxes as state governments look for potential revenue sources, the association said.
Under the new policy, the FAA is grandfathering taxes in place before 1987 and provides a three-year transition period for tax revenue uses currently not in compliance. The FAA agreed not to seek enforcement against an airport sponsor in cases where the taxes are imposed by another entity and the revenue use is not controlled by the sponsor. However, the FAA warned it will pursue enforcement against these other entities if they violate its revenue-use policy.