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State of California

July, 2015

Randy Fiertz, Director – Airport Compliance and Management Analysis, conducted a brief tour 

of the FAA’s Western Pacific Region during July, 2015. The following questions concerning 

state and local sales taxes on aviation fuel were directed to Mr. Fiertz.

Question #1

Are “fees” the same as taxes? In other words, if California voters have voted to implement a 

“fee” on aviation fuel that is used for a specific non-aviation purpose, does that fall under the 

fuel tax requirements?

FAA Response to Question #1

Generally, “fees” are not considered a “tax”. The U.S. Government Accountability Office’s 

(GAO) ruling in the decision of the California E-Waste Recycling Fee, File B-320998, May 4, 

2011, (accessed at http://www.gao.gov/decisions/appro/320998.pdf) provides guidance for the 

determination of a fee versus a tax. A fee is designed to defray the costs of a regulatory activity

(or government service), while a tax is designed to raise general revenue. A true fee must be 

proportionate to the necessary costs of the service provided, whereas a tax may not be. Your 

example of California implementing a voter approved fee on aviation fuel does not appear to 

reflect any proportionate tie to the cost of a service. Accordingly, we would need to evaluate the 

actual law imposing such a fee on the sale of aviation fuel to an end user to determine whether 

the fee would more properly be classified as a sales tax on the consumption of a product. 

The federal statutory requirements, as clarified in the Revenue Use Policy Amendment, subject 

state taxes on aviation fuel to the revenue use requirements required under 49 U.S.C. 47133. 

Under federal law, airport operators that have accepted federal assistance generally may use 

airport revenues only for airport-related purposes. Local taxes (except those taxes in effect on 

December 30, 1987) on aviation fuel are subject to airport revenue use requirements. State taxes 

(except those taxes in effect on December 30, 1987) on aviation fuel (imposed by either an 

airport sponsor or a non-sponsor) are subject to use either for a state aviation program or for 

airport-related purposes.

Question #2

Why does the state need to follow a policy requirement as opposed to a regulation?

FAA Response to Question #2

The aviation fuel tax provision is a statutory requirement. The Policy and Procedures 

Concerning the Use of Airport Revenue; Proceeds from Taxes on Aviation Fuel (Docket No. 

FAA-2013-0988) (Policy Amendment) is published under the authority described in Subtitle VII, 

part B, chapter 471, section 47122, and the Federal Aviation Administration Authorization Act 

of 1994, §112(a), Public Law 103-305, 49 U.S.C. 47107(l)(1) (Aug. 23, 1994).
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Question #3

How did FAA “jump” from a tax on aviation fuel to a general sales tax that also applies to 

aviation fuel?

FAA Response Question #3

The FAA explained the reasoning for considering a general sales tax as a tax on aviation fuel in 

the Policy Amendment in the response to Comment 3. (See 79 Fed. Reg. 66825-6) The FAA’s 

rationale for clarifying that general sales taxes also collected on aviation fuels constitute “taxes 

on aviation fuel” is based on the plain reading of the statute recodified in 49 U.S.C. 47107(b). 

Additionally, determining that the statute did not include general taxes would permit States to tax 

aviation fuel as “general” taxes without limit, and would be inconsistent with the purposes of the 

revenue use statutes. (79 Fed. Reg. 66826)

Question #4

What about state costs at airports such as providing firefighting services? CA needs to figure 

that out as an offset.

FAA Response Question #4

The costs of providing firefighting services at the airport are considered an allowable operating 

cost of the airport. Accordingly, the proceeds from aviation fuel taxes may be used for airport 

firefighting services. Please see the “State of Georgia Aviation Fuel Tax Questions” posted at 

Docket No. FAA-2013-0988 for the requirements for general fund offsets. 

(http://www.regulations.gov/#!documentDetail;D=FAA-2013-0988-0016) For a discussion of 

other types of capital expenditures that might be a permissible use of aviation fuel taxes, please 

refer to the “State of Michigan Questions and Answers 2015 03 23” posted at Docket No. FAA2013-0988. (http://www.regulations.gov/#!documentDetail;D=FAA-2013-0988-0043)

Question #5

Can Action Plans be submitted before knowing what can be offset?

FAA Response Question #5

Yes. FAA has issued two documents (“State of Georgia Aviation Fuel Tax Questions” and 

“State of Michigan Questions and Answers 2015 03 23”) that provide guidance on the offsetting 

of funds. This should assist in determining what offsets can be used by California in ample time 

to develop an Action Plan to meet the December 7, 2015 due date. The Action Plan should 

explain the steps the State will need to take to become compliant with the revenue use 

requirements for aviation fuel taxes. Additionally, the FAA issued guidance, “Final Aviation 

Fuel Tax Grandfathering Action Plans Final 2015 07 10,” which outlines several scenarios to 

assist airport sponsors and non-sponsors to determine an appropriate course of action and/or 

development of an action plan for aviation fuel taxes that may or may not qualify for 

grandfathered status.