Mr. Byron K.Huffinan, Acting Director 

Federal Aviation Administration 

Office of Airport Compliance and Management Analysis 

800 Independence A venue, SW 

Washington, DC 20591 

Dear Mr. Huffman: 

Re: FAA Policy and Procedures Concerning the Use of Airport Revenue; 

Proceeds from Taxes on Aviation Fuel (79 Fed. Reg. 6628) 

The purpose of this letter is to confirm that the State of Missouri is in compliance with the 

Federal Aviation Administration's Policy and Procedures Concerning the Use of Airport 

Revenue; Proceeds from Taxes on Aviation Fuel (79 Fed. Reg. 6628). 

I have enclosed a copy of an Executive Summary prepared by MoDOT's Chief Counsel's 

Office which outlines Missouri's compliance with the Policy. MoDOT will advise the 

Federal Aviation Administration of any future changes to state laws that could affect 

compliance. 

If you have any questions or if I can be of any further assistance, please do not hesitate to 

contact me. 

Sincerely, 

Wwv\ L 

Amy Ludwig 

Administrator of Aviation 

Enclosure 

cc: Jim Johnson, Federal Aviation Administration 

Bill Miller, Office of Governor Jay Nixon 

Our mtsston Is to provide a world-class transportation experience that 

delights our customers and promotes a prosperous Missouri. 

www.modot.org 
(2) Missouri State Sales and Use Tax on Aviation Fuel 

(A) Volume Tax: One of the two taxes authorized by state law to be imposed on aviation 

fuel is in section 155.080, Revised Statutes of Missouri (RSMo), which levies a nine-cent per 

gallon tax on fuel used to propel aircraft with reciprocating engines to be deposited in the 

Aviation Trust Fund (ATF). 

1. When Passed: This tax was passed by the General Assembly (GA) in 1990. 

2. Usc of Proceeds: The ATF is used solely for aviation purposes as provided in 

section 305.230 RSMo, which purposes are consistent with the Revenue Use Policy. These 

aviation purposes include, but are not limited to: (I) Preventive maintenance of runways, 

taxiways and aircraft parking; and (II) Acquisition ofland to develop and improve airports; and 

(III) Earthwork and drainage needed to construct, reconstruct or repair runways, taxiways, and 

aircraft parking areas; and (IV) Construct or restore runways, taxiways, or aircraft parking areas; 

and (V) Acquire land or easements to satisfy FAA safety requirements; and (VI) Others. 

(B) Sales!Use Tax: Chapter 144 RSMo imposes a four percent (4%) statewide sales and 

use tax on all sales at retail in Missouri of tangible personal property or sales that occurred in 

other states but in which the tangible personal property is used or consumed in Missouri. 

Tangible personal prope1ty includes aviation jet fuel. See American Airlines, Inc. v. Director of Revenue, 389 S.W.3d 653 (Mo.banc 2013). 

1. Aviation Jet Fuel: Originally passed in 1993, section 144.805.4 RSMo 

dedicates the revenue derived from the state sales and use tax on aviation jet fuel to the ATF, 

except for the portion of the revenue that is designated for nonaviation purposes by the Missouri 

Constitution or section 144.071 RSMo. 

2. Tax Rate: The total state sales and use tax rate on aviation jet fuel is 4.225%. 

3. Exemptions: Section 144.805 exempts from the state sales and use tax on 

aviation jet fuel common carriers engaged in interstate air transportation of passengers and cargo 

if the common carrier has paid state sales and use tax on aviation jet fuel in a maximum and 

aggregate amount of$1.5 million. 

4. Aviation Trust Fund Rate: The state sales and use tax rate that generates 

revenue for deposit into the ATF for aviation purposes as set fo1th in section 305.230 RSMo (see 

(2){A)2. above) is 3.0% of the 4.225%. The remaining 1.225% is deposited into other state 

funds for other, nonaviation purposes as outlined below: 
Amendment No. 1 that imposed a 1/Sth of 1 percent (0.125%) state sales and use tax with the 

proceeds dedicated to the control, management and conservation of bird, fish, game and wildlife by the Missouri Department of Conservation. See article IV, section 43(a), Missouri Constitution 

(ATTACHM:ENT 2). Because voters adopted this 0.125% state sales and use tax prior to December 30, 1987, the proceeds from this tax imposed on aviation jet fuel is excepted (i.e., grandfathered) from the Revenue Use Policy requirement that its revenues must be used for a state 

aviation program. 

C. Parks and Soils: On August 7, 1984, voters approved Constitutional Amendment No.2 that imposed a 1/lOth of 1 percent (0.100%) state sales and use tax with the 

proceeds dedicated for state parks and soil and water conservation purposes by the Missouri Department of Natural Resources. See atticle N, section 47(a), Missouri Constitution 

{ATTACHMENT 3). Because voters adopted this 0.100% state sales and use tax prior to December 30, 1987, the proceeds from this tax imposed on aviation jet fuel is excepted (i.e., grandfathered) from the Revenue Use Policy requirement that its revenues must be used for a state 

aviation program. 

D. Conclusion: Since each of these 1.125% state sales and use taxes tax 

imposed on aviation jet fuel were initially approved by voters prior to December 30, 1987, atld the 

proceeds directed to nonaviation purposes, the continued deposit of these proceeds to public schools, conservation and parks and soils is not a violation of the Revenue Use Policy. 

4. Cap: Section 144.805 says the atnount of proceeds from the aviation jet fuel 

state sales and use tax that may be deposited into the ATF shall not exceed ten million dollars 

per calendar year. This $10 million cap would violate the Revenue Use Policy if the total amount of proceeds from the aviation jet fuel state sales and use tax exceeded $10 million in any year with the excess amount deposited into the General Revenue Fund (GRF) to be used for nonstate 

aviation purposes. But, the ATF has never received more than $10 million in aviation jet fuel 

state sales and use tax revenues (for the past several years, deposits have averaged $5.5 to $6.0 million). 

5. Expiration Date: The provisions in section 144.805 that requires the transfer of the proceeds from the state sales and use tax on aviation jet fuel to the ATF shall expire on December 31, 2023, which means the proceeds would instead be deposited into the GRF. MoDOT will monitor the expiration date to ensure it is always extended (or deleted) while 

current federal law and the FAA's Revenue Use Policy is effective. 

(3) Commitment to Advise: MoDOT is committed to advise the FAA of any subsequent amendments that could affect its excepted (i.e., grandfathered) status. 
144.701. One cent sales and use tax designated local tax--collection 

fee allowed state--school district trust fund created, invesbnent 

Currentness 

The revenue derived from the rate of one cent on the dollar ofthe tax imposed by sections 144.010 to 144.430 and sections 

144.600 to 144.745 which shall be deemed to be local tax revenue, shall be deposited by the state treasurer in a special trust 

fund, which is hereby created, to be known as the "School District Trust Fund". The money in fue fund shall be distributed to the 

public school districts of the state in the manner provided in sections 163.031 and 163.087 and shaii be appropriated and used 

for no other purpose; except that, of all refunds made of taxes collected under the provisions of sections 144.010 to 144.430 

and sections 144.600 to 144.745, the appropriate percentage of any refund shall be paid from the school district trust fund, and 

except that the slate may retain a fee as a charge for collecting and disbursing moneys so deposited, and transfers may be made 

from the fund as provided in section 164.013. The state collection fee shall not exceed two and one-half million dollars or one 

percent of the amount deposited in the fund, whichever is less. The fee shall be negotiated annually through the appropriation 

process. Any balance remaining in the fund at the end of an appropriation period shall not be transferred to general revenue, 

and the provisions of section 33.080, shall not apply to the fund. Moneys in the trust fund shall be invested by the state treasurer 

in the same deposits and obligations in which state funds are authorized by law to be invested, except that the deposits and 

obligations shall mature and become payable in time for distribution of the funds as provided in sections 163.031 and 163.087. 

Credits 

(Adopted by Proposition C, approved at November 2, 1982 election, eff. Jan. 1, 1983. Amended by L.l983, p. 441, H.B. No. 

310, § 1, eff. March3, 1983; 1.1993, S.B. No. 380, §A.) 

V. A.M. S. 144.701, MOST 144.701 

Statutes are current through the end of the 2015 Veto Session of the 98th General Assembly, pending corrections received from 

the Missouri Revisor of Statutes. Constitution is current through the November 4, 2014 General Election. 

V, ~~·:l:\\VNexr 3J 2015 Thomeon neuters. ~Jo cklim to onginal U.S_ Govar;-,ment VVor~s. 1 

ATTACHMENT 1 
Conservation 

V .A. M.S. Canst. Art. 4, § 43(a) 

§ 43(a). Sales tax, use for conservation purposes 

Currentness 

For the purpose of providing additional moneys to be expended and used by the conservation conunission, department of 

conservation, for the control, management, restoration, conservation and regulation of the bird, fish, game, forestry and wildlife 

resources of the state, including the purchase or other acquisition of property for said purposes, and for the administration of 

the laws pertaining thereto, an additional sales tax of one-eighth of one percent is hereby levied and imposed upon al\ sellers for 

the privilege of selling tangible personal property or rendering taxable services at retail in this state upon the sales and services 

which now are or hereafter are listed and set forth in, and, except as to the amount of tax, subject to the provisions of and to 

be collected as provided in the ''Sales Tax Law" and subject to the rules and regulations promulgated in connection therewith; 

and an additional use tax of one-eighth of one percent is levied and imposed for the privilege of storing, using or consuming 

within this state any article of tangible personal property as set forth and provided in the "Compensating Use Tax Law" and, 

except as to the amount of the tax, subject to the provisions of and to be collected as provided in the "Compensating Use Tax 

Law" and subject to the rules and regulations promulgated in connection therewith. 

Credits 

(Adopted at general election Nov. 2, 1976.) 

Notes of Decisions (2) 

V. A.M. S. Canst. Art. 4, § 43(a), MO CONST Art. 4, § 43(a) 

Statutes are current through the end of the 2015 Veto Session of the 98th General Assembly, pending corrections received from 

the Missouri Revisor of Statutes. Constitution is current through the November 4, 2014 General Election. 

End l>f Oo~'Uitl~rt! t;· 20!5 Thomsu~ R~u!crs. No daim I(> arigin"l U.S. (ja~~nuncnt \Yorks. 

',',,;;:stl:;·r•Nexr :'} 2015 Thomson Reuter.:>. No c:i21im to ongina: U.2·. Go1Jar:1t:-ten~ Wo;ks. 1 

ATTACHMENT 2 
§ 47(a). Sales and use tax levied for soil and water conservation and for state 

parks--distribution of parks sales tax fund to counties, purpose, limitation 

Currentness 

For the purpose of providing additional monies to be expended and used by the department of natural resources through the 

state soil and water districts commission as defmed in Section 278.070, RSMo, for the saving ofthe soil and water of this state 

for the conservation of the productive power of Missouri agricultural land, and by the department of natural resources through 

the division responsible for the State park system for the acquisition, development, maintenance and operation of state parks 

and state historic sites in accordance with Chapter 253, RSMo, and for the administration of the laws pertaining thereto, an 

additional sales tax of one-tenth of one percent is hereby levied and imposed upon all sellers for the privilege of selling tangible 

personal property or rendering taxable services at retail in this state upon the sales and services which now arc or hereafter arc 

listed and set forth in, and, except as to the amount of tax, subject to the provisions of and to be collected as provided in the 

"Sales Tax Law" and subject to the rules and regulations promulgated in connection therewith; and an additional use tax of 

one-tenth of one percent is levied and imposed for the privilege of storing, using or consuming within this state any article of 

tangible personal property as set forth and provided in the "Compensating Use Tax Law'' and, except as to the amount of the 

tax, subject to the provisions of and to be collected as provided in the "Compensating Use Tax Law" and subject to the rules 

and regulations promulgated in connection therewith. In addition, monies deposited in the state parks sales tax fund pursuant to 

the provisions of section 47(b) of this article shall also be appropriated to make payments to counties for a period offive years 

for the unimproved value of land for distribution to the appropriate political subdivisions as payment in lieu of real property 

taxes for privately owned land acquired by the department of natural resources for park purposes after July 1, 1985, in such 

amounts as detennined by appropriation, but in no event shall such amounts be more than the amount of property tax imposed 

by political subdivisions at the time the department acquired or acquires such land. 

Credits 

(Adopted at special election Aug. 7, 1984. Amendments adopted at general election Nov. 8, 1988; general election Nov. 8, 

1994; general election Nov. 5, 1996.) 

Editors' Notes 

TERMINATION 

<For termination of this section, see Section 47(c) of this article.> 

V. A.M. S. Cons!. Art. 4, § 47(a), MO CONST Arl4, § 47(a) 

Stamtes are current through the end of the 2015 Veto Session ofthe 98th General Assembly, pending corrections received from 

the Missouri Revisor of Statutes. Constitution is current through the November 4, 2014 General Election. 

i:- 1015 Tlwnm>n It euler>. Nodaim W orig:inol U.S Gov~rnm~nt Works. 

\'1-~~-tl,::\vNexr@ 20;5 Thomsl)n Reuters. No clairn to origtna! U.S. Government Works. 

ATTACHMENT 3