City of Bullhead City 

Office of the City Manager 

2355 Trane Rd. 

Bullhead City, AZ 86442 

December 9, 2015 

Federal Aviation Administration 

Attn: Director, Office of Airport Compliance and Management Analysis 

800 Independence Avenue, SW 

Washington, DC 20591 

Re: Local Tax on Aviation Fuel 

Exception of Local Tax from FAA Revenue Use Policy Requirements 

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 Concerning the Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel (79 FR 

66282) (collectively the "FAA Policy"). 

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 amend any noncompliant state or local laws as necessary to conform to the FAA Policy. The City of Bullhead City 

("Bullhead City") believes in good faith Bullhead City has no local tax laws that fail to conform with the 

FAA Policy; however, Bullhead City 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 II, Definitions, Paragraph (B)(2). The purpose of this letter is to 

provide the FAA with the background on the Bullhead City aviation and jet fuel tax to demonstrate to the 

FAA that Bullhead City'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 privilege tax in Arizona is governed by the Model City Tax Code ("MCTC"). The 

MCTC was originally drafted in response to 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 In 1987, all incorporated cities and towns in the State of Arizona repealed their existing 

transaction privilege tax codes and adopted the MCTC. Since the orig ina I 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. 

Bullhead City Tax 

Bullhead City adopted the MCTC on July 21 , 1987, with the law becoming effective on August 21, 1987. 

Both the original Bullhead City Tax Code (enacted before August 21, 1987) and the adopted MCTC 

(effective on August 21, 1987) imposed a transaction privilege tax on the sale of aviation fuel and jet fuel. 

[Bullhead City Ordinance 87-130] 

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

December 30, 1987, Bullhead City's transaction privilege tax qualifies for the exception set forth in the 

FAA Policy Section II, Definitions, Paragraph (B)(2) related to airport revenue and is therefore not subject 

to the revenue use requirements of the FAA Policy. As an aside, the FAA Policy also references in 

City of Bullhead City 

Office of the City Manager 

2355 Trane Rd, Bullhead City, AZ 86442 

Phone(928)763-0122 
Federal Aviation Administration 

December 8, 2015 

Page2 

Section III(A)(2) and Section IV(C)(1) that local taxes on aviation fuel in effect on December 30, 1987, are 

excepted from the requirements of the policy related to the revenue use; the tax imposed by Bullhead City 

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. 

cc: Garnet Emery, Esq., Bullhead City Assistant City Attorney 

Rudy Vera, Finance Director 

Loretta Kearns, Revenue Manager/Tax Administrator 

City of Bullhead City 

Office of the City Manager 

2355 Trane Rd, Bullhead City, AZ 86442 

Phone(928)763-0122