Finance Management 

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 City of Livermore 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 

the process likely necessary to amend any non-compliant 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 California will be submitting an Action Plan pertaining 

only to the state's portion of the tax. 

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 the City of Livermore believes these local 

expenditures exceed the sales tax revenues derived from the sale of aviation fuel. 

Applicable Law that May Require Amendments for Compliance 

Approximately one percent of the currently 2.25% in non-exempt sales taxes on jet fuel 

(Jet-A) are collected at the Livermore Municipal Airport from a local transaction and use 

tax imposed by Alameda County. 

• 0.5% rate enacted by Alameda County voters in 2015 and restricted to the 

transportation improvements in every city throughout Alameda County. 

• 0.5% rate enacted by Alameda County voters in 2004 and restricted to 

emergency medical, hospital, public health, mental health and substance abuse 

services to indigent, low-income and uninsured adults, children and families, 

seniors and other residents of Alameda County. 

City Hall 1052 South Livermore Avenue · Livermore, CA 94550 www.cityoflivermore.net 
tax revenues derived from aviation fuel due to special taxes imposed the Alameda 

County is about $13,000. 

In contrast, the City spends more on capital and operating costs for the Livermore 

Airport than the relevant sales tax revenues estimated to be derived from aviation fuel. 

The City of Livermore's expenditures on airport capital and operating costs include, but 

are not limited to: 

• Public Safety services • Fire protection services • Emergency response service 

• Access to and from airports, including roads, highways, and public transportation 

In addition to the locally imposed transaction and use tax rate, the City of Livermore 

receives revenues derived from the state sales and use tax rate for the purposes of 

(health and human services, criminal justice and transportation). These statewide voter 

approved tax rates have been designated for specific purposes. It is our understanding 

that the state will provide an action plan response as it relates to necessary steps for 

assuring compliance related to these revenues. 

Reporting Requirement and Tracking System 

The City of Livermore, 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 City of Livermore 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 City of Livermore 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 to achieve compliance. Segregating and 

reporting the correct amount of tax revenue will further complicate California's already 

complex sales tax system and increase administrative costs. 

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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. 

~ 

Douglas Alessio 

Administrative Services Director 

cc: City Attorney 

City Manager 

Public Works Director 

Airport Manager 

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

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