Tax News

CCH (cch.taxgroup.com) reports:

The House on passed the FAA Reauthorization Bill of 2007 (HR 2881) by a vote of 267-151 on September 20. The measure, which funds the FAA for four years, includes the Airport and Airway Trust Fund Financing Bill of 2007 (HR 3539), which was approved by the House Ways and Means Committee to raise airline fuel taxes in order to pay for air traffic control system improvements and modernization efforts (TAXDAY, 2007/09/18, C.2).
The measure would increase the general aviation jet fuel tax rate from 21.8 cents per gallon to 30.7 cents per gallon. It would also increase the aviation fuel tax rate from 19.3 cents per gallon to 24.1 cents per gallon. Lawmakers said the funds would be used to provide funding for a next generation satellite air traffic control system, and to stabilize and strengthen the Airport and Airway Trust Fund.
The tax increases were approved by the Ways and Means Committee on September 18 when members voted unanimously to supportHR 3539. That bill, which would extend the taxes from September 30, 2007, through September 30, 2011, was included in HR 2881.
According to estimates from the Joint Committee on Taxation released on September 17, the tax provisions would raise $1.8 billion over the next 10 years. House Transportation and Infrastructure Committee Chairman Jim Oberstar, D-Minn., said the fuel tax increases only apply to noncommercial aviation, and the revenues will only pay for air traffic control modernization efforts.
The Bush administration on September 19 threatened to veto the FAA legislation, criticizing its reforms as inadequate and charging that the bill would worsen the status quo by undoing the actions of past Congresses. The Statement of Administration Policy suggests that lawmakers focus on ways to better target highway resources without resorting to tax increases or budget gimmicks.
By Stephen K. Cooper, CCH News Staff
Airport and Airway Trust Fund Financing Act of 2007, as Reported by the House Ways and Means Committee, HR 3539