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GA Caucus Seeks to Close Loophole Stealing Aviation Funds

EAA asks members to urge congressional support

April 19, 2012 - EAA is asking its members to urge their congressional representatives to support a letter from the House General Aviation Caucus, which supports closing a loophole in federal regulations that is moving aviation fuel tax revenue to highway trust funds.

The House GA Caucus this week is seeking co-signers for the letter, co-authored by Rep. Sam Graves (R-MO), a pilot and longtime EAA member, and Rep. John Barrow (D-GA). The letter asks for the inclusion of language in the American Energy and Infrastructure Jobs Act of 2012 (H.R. 7) that would repeal a fuel fraud provision that has caused taxes on jet fuel sales to be diverted to the Highway Trust Fund.

The problem arose when some trucking firms allegedly began purchasing jet fuel for use in their fleets, as that fuel is taxed at a lower rate than highway diesel fuel. In order to ensure that those truckers pay the proper highway taxes, taxes for non-commercial jet fuel have been deposited in the Highway Trust Fund instead of the Airport and Airway Trust Fund, the fund used for airport improvements nationwide. Jet fuel vendors can register to have their taxes switched to the aviation fund, but only after a large amount of paperwork and a substantial administrative burden.

Estimates quoted in the GA Caucus letter estimates that $50 million a year is lost to the aviation trust fund because of the lost revenue.

"Congress attempted to solve what it perceived as a problem for the highway fund, even though there is no proof of widespread fuel fraud by truckers," said Doug Macnair, EAA's vice president of government relations. "Instead, it created a huge shortfall for the Airport and Airways Trust Fund, which some have argued has been in need of additional funding for years. We strongly support these steps to address the situation and encourage our members to weigh in by contacting their congressmen in support of this measure."

EAA members can go to www.house.gov to find contact information for their congressional representative, and urge them to co-sign the House GA Caucus letter supporting language in H.R. 7 that would repeal the fuel fraud provision.

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