Federal Aviation Administration 

800 Independence Avenue SW 

Washington, DC 20591 

Subject: Action Plan Submission Pursuant to FAA Policy and Procedures Concerning the Use of Airport 

Revenue (79 Fed. Reg. 66282-01, November 7, 2014). 

Dear Mr. Brown: 

This letter is in response to the request for an action plan for the County of San Mateo to convey its intent 

to comply with the FAA ruling related to sales tax revenues derived from aviation fuel sales to the extent 

that ruling complies with federal law. This includes t he process likely necessary to amend any noncompliant local ordinances to achieve compliance and the development of reporting requirements and 

tracking systems for specific information on aviation fuel tax revenues which in California means "jet fuel" 

as other types of aviation fuels are exempt from sales tax in this state. It is our understanding that the 

State of Cal ifornia will be submitting an action plan pertaining only to the state's portion of the tax. 

The County of San Mateo is in a unique situation. San Francisco International Airport (SFO) is 

located on County land but is owned and operated by the City and County of San Francisco, 

therefore, the County of San Mateo derives little benefit from the FAA funds provided to SFO for 

capital and operations. On the other hand, the County expends significant resources on 

addressing issues related to aviation activity at SFO. In addition, the County operates two general 

aviation airports in the cities of San Carlos and Half Moon Bay, and also devotes resources to the 

operations of those airports. 

California's state and local governments already provide extensive services to airports including 

infrastructure maintenance, fire protection, public safety, environmental protection and noise 

abatement. These services and improvements are funded with general sales taxes and other taxes and 

County of San Mateo believes these local expenditures may exceed the sales tax revenues derived from 

the sale of aviation fuel and covered by the FAA ruling. The County also receives some sales tax revenue 

derived from jet fuel sales that are exempt from the FAA ruling because that revenue comes from taxes 

adopted prior December 30, 1987. 
The County of San Mateo in conjunction with its advisors has begun to identify the required data and 

steps necessary to comply. The internal process to undertake this effort, including developing a tracking 

system for discrete information on aviation fuel tax revenues, is complex and extensive. For example, the 

State Board of Equalization, the tax collection agency with which the County of San Mateo has a contract 

for sales tax collections, does not require jet fuel sellers to segregate sales tax revenue derived from the 

sale of jet fuel from other types of taxable sales made by the same vendor. Therefore, it is presently 

impossible for the County to determine the exact amount of sales tax derived from sales of jet fuel. Local 

agencies would need the state to change its tax reporting standards to require fuel sellers to quantify the 

amount of tax derived from the sale of aviation fuel to achieve compliance. Segregating and reporting 

the correct amount of tax revenue w ill further complicate California's already complex sales tax system 

and increase administrative costs. 

Transition Period 

If the County determines that its expenditures on airport capital, operating costs and other aviation 

related issues at SFO, San Carlos and Half Moon Bay do not exceed sales tax revenues derived from 

aviation fuel (and covered by the FAA regulation at issue), it will attempt to comply w ith the requirements 

set forth by the FAA ruling, but may also pursue legislative and/or legal remedies. The County w ill notify 

the FAA of specific actions, if any, to be completed during the transition period and work with the state 

to ensure compliance before the December 8, 2017 deadline. 

erely, 

L. Maltbie 

nty Manager I Clerk of the Board 

John Beiers, County Counsel 

Brian Wong, Deputy County Counsel 

Jim Saco, Budget Director 

Connie Juarez-Diroll, Legislative Director 

Jay .Chamberlain, Department of Finance (Jay.Chamberlain@dof.ca.gov)