Federal Aviation Administration 

Attn: Director, Office of Airport Compliance and Management Analysis 

800 Independence Ave, SW 

Washington, DC 20591 

Re: Local Tax on Aviation Fuel 

Exception of Loca~ Tax from FAA Revenue Use Policy.Requirements 

City of Scottsdale is the sponsor of the Scottsdale General Aviation Airport. This letter is in regards to the 

Federal Aviation Administration ("FAA") adopted Policy and Procedures Concerning the Use of Airport 

Revenue (64 FR 7696) and the update to'that policy known as the Policy and Procedures Con,cerning the 

Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel (79 FR 66282) (collectively the "FAA Pol i~y"). · · · · 

Pursuant to the update effective December 8, 2014, state and local governments were encouraged to submit 

an action plan to the FAA,by December 8, 2015 stating the government's plan to ame.nd any non-compliant 

state 'or local laws as necessary to conform to the FAA Policy. The City of Scottsdale has no local tax laws 

that fail to conform' to the FAA Policy. Scottsdale does impose a tax on the sale of aviation and jet fuel that 

has been in effect since before December 30, 1987 thus qualifying for the exception from the FAA Policy 

requirements as set forth in· Section u·, Definitions, Paragraph (B)(2). This letter provides the FAA with the 

background on the Scottsdale aviation and jet fuel tax to demonstrate to the FAA that Scottsdale's tax 

qualifies for the exception. · · 

Background and History of the Model City Tax Code 

Unlike the sales tax imposed by most states, the State and local municipalities in Arizona impose a 

transaction privilege tax on the privilege of conducting business. The tax is levied on the business, rather 

than the consumer, although the business may pass the tax along to the consumer. 

Municipal transaction· p·rivilege tax in Arizona is governed by the Model City Tax Code ("MCTC"). The MCTC 

was originally drafted in response tb a recommendation by a legislatively created municipal sales tax study 

commission in 1984. The goal· of tHe MCTC was to create a more uniform municipal tax code statewide. In 

1987/ all incorporated citi'e's a·nd towns in the State of Arizona repealed their existing transaclion privilege 

tax codes and adopted the MCTC. Since the original adoption of the MCTC in 1987 to the current version 

last amended in 2015, there has been imposed by all Arizona cities and towns a transaction privilege tax on 

the sale of aviation and jet fuel. · · · ' r • • 

. :. 

Scottsdale Tax 

Scottsdale adopted the Model City Tax Code on February 2, 1987, with the law becoming effective on April 

1, 1987. Both the original Scottsdale City Tax Code (enacted before April .1, 1987) and the adopted Model 

City Tax· Code imposed a transaction priv,ilege tax on. the sale of aviation fuel and jet fuel [Scottsdale Ordinance 1928]. · · · ·' ·. ' . 

As Scottsdale had in effect a transaction privilege tax on the sale of aviation and jet fuel since before 

,/\ t _!• ' t 1 • • :,, 

', !' 
requirements of the policy related to the revenue use; the tax imposed by Scottsdale on aviation and jet fuel 

also qualifies for these exceptions which have been a part of the FAA Policy since its inception on February 16, 1999. 

Thank you for your time and attention to this matter. 

Sincerely, 

Brian K. Biesemeyer 

Acting City Manager 

Cc: Jeff Nichols, City Treasurer 

Gary Mascaro, Aviation Director 

Cliff Frey, Senior Assistance City Attorney 

Gina Kirklin, Enterprise Finance Manager 

Terry Hoglund, Business Services Manager