Story ID: 
NATA Seeks Study on Fuel Fraud Tax
By: Kerry Lynch
Caption: Industry has estimated that as much as $50 million in aviation taxes are diverted annually into the highway trust fund.
Word Count: 195
The National Air Transportation Association (NATA) is hoping to convince lawmakers to look into the lost aviation revenues from the so-called “fuel fraud” tax. Under a decade-old law, non-commercial jet fuel is taxed at the higher highway diesel fuel rate and deposited into the highway trust fund. The revenues remain there unless FBOs become government-recognized “ultimate vendors” and seek rebates for the difference between highway and aviation use taxes.

Congress enacted the law in the 2005 highway reauthorization bill, ostensibly out of concern that the trucking industry was tapping into jet-A fuel to avoid the additional 2.5-cent-per-gallon cost of highway diesel fuel taxes. 

Undoing the policy has proved politically difficult since the highway trust fund has long been in danger of becoming insolvent and is dependent on all available revenues. NATA president and CEO Tom Hendricks told attendees at last week’s Air Charter Safety Foundation annual Safety Symposium that the industry is pushing for a Government Accountability Office study that could measure how much revenue is diverted to the highway trust fund. The aviation trust fund loses as much as $50 million annually to fuel-fraud taxes, according to past estimates.