Joint Committee Report JCS-1-16: General Explanation of Tax Legislation Enacted in the 114th Congress
JCS-1-16
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PART EIGHT: AIRPORT AND AIRWAY EXTENSION ACT OF 2015
(PUBLIC LAW 114-55)139
A. Extension of Spending Authority and Taxes Funding Airport and Airway Trust Fund (secs. 201 and 202 of the Act and secs. 4083, 4801, 4261, 4271, and 9502 of the Code)
Present Law
Taxes dedicated to the Airport and Airway Trust Fund
Excise taxes are imposed on amounts paid for commercial air passenger and freight transportation and on fuels used in commercial and noncommercial (i.e., transportation that is not "for hire") aviation to fund the Airport and Airway Trust Fund.140 The present aviation excise taxes and rates are as follows:
Tax (and Code section) Tax Rates
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Domestic air passengers (sec. 4261) 7.5 percent of fare, plus
$4.00 (2015) per domestic
flight segment generally141
International air passengers $17.70 (2015) per arrival or
(sec. 4261) departure142
Amounts paid for right to award 7.5 percent of amount paid
free or reduced rate passenger air
transportation (sec. 4261).
Air cargo (freight) transportation 6.25 percent of amount
(sec. 4271) charged for domestic
transportation; no tax on
international cargo
transportation
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Tax (and Code section) Tax Rates
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Aviation fuels (sec. 4081):143
Commercial aviation 4.3 cents per gallon
Non-commercial (general) aviation:
Aviation gasoline 19.3 cents per gallon
Jet fuel 21.8 cents per gallon
Fractional aircraft fuel surtax 14.1 cents per gallon
(sec. 4043)
The Airport and Airway Trust Fund excise taxes (except for 4.3 cents per gallon of the taxes on aviation fuels and the 14.1 cents per gallon fractional aircraft fuel surtax) are scheduled to expire after September 30, 2015. The 4.3-cents-per-gallon fuels tax rate is permanent.
With respect to fractional aircraft, the exemption from the excise tax on commercial transportation for fractional aircraft is scheduled to expire after September 30, 2015.144 The fractional aircraft fuel surtax expires after September 30, 2021.
Airport and Airway Trust Fund expenditure provisions
The Airport and Airway Trust Fund was established in 1970 to finance a major portion of national aviation programs (previously funded entirely with General Fund revenues). Operation of the Trust Fund is governed by parallel provisions of the Code and authorizing statutes.145 The Code provisions govern deposit of revenues into the Trust Fund and approve expenditure purposes in authorizing statutes as in effect on the date of enactment of the latest authorizing Act. The authorizing Acts provide for specific Trust Fund expenditure programs.
No expenditures are permitted to be made from the Airport and Airway Trust Fund after September 30, 2015. The purposes for which Airport and Airway Trust Fund monies are permitted to be expended are fixed as of the date of enactment of the FAA Modernization and Reform Act of 2012; therefore, the Code must be amended in order to authorize new Airport and Airway Trust Fund expenditure purposes.146 The Code contains a specific enforcement provision to prevent expenditure of Trust Fund monies for purposes not authorized under Code section 9502.147 This provision provides that, should such unapproved expenditures occur, no further aviation excise tax receipts will be transferred to the Trust Fund. Rather, the aviation taxes will continue to be imposed, but the receipts will be retained in the General Fund.
Explanation of Provision
The Act extends through March 31, 2016, the taxes, exemptions, and expenditure authority that were scheduled to expire on September 30, 2015.
Effective Date
The provision is effective on the date of enactment (September 30, 2015).
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