g

, 

Subject: Federal Aviation Administration Policy on Proceeds from Aviation Fuel Taxes 

Dear Mr. Brown: 

I am writing in response to the Federal Aviation Administration's (FAA's) Policy and 

Procedures Concerning the Use of Airport Revenue, (79 Fed. Reg. 66282, November 7, 

2014). The San Francisco County Transportation Authority administers the Prop K 

transportation half-cent sales tax. San Francisco voters approved Prop K, the "San 

Francisco County Transportation Authority Reauthorization Ordinance," in 2003. In 

accordance with State law, Prop K continues in effect the existing local transactions and 

use tax (commonly referred to as the "sales and use tax") of one-half of one percent 

approved by the voters as Prop B in 1989 and authorizes implementation of a new 30-year 

Expenditure Plan identifying projects and programs to be funded by the sales and use tax. 

(See City and County of San Francisco Municipal Code section 1401; California 

Government Code sections 6001 et seq. [Sales and Use Tax Law] 7251 et seq.; 

[Transactions and Use Tax Law]; Public Util. Code sections 1331000 et seq. [Bay Area 

County Traffic and Transportation Funding Act].) 

The San Francisco transportation half-cent local sales and use tax for transportation is 

considered an add-on tax and is levied in a taxing district that corresponds to and is limited 

by the boundaries of San Francisco County (the "District"). The tax is imposed on all 

retailers in the District for the sale, storage, use or other consumption of all tangible 

personal property the in the District (Municipal Code section 1406, 1408). We have 

determined that the San Francisco transportation half-cent local sales and use tax for 

transportation is not levied at SFO because SFO is not within the taxing District. 

Furthermore, the Municipal Code exempts from the tax sales to and use by operators of 

aircraft to be used or consumed principally and directly and exclusively as common carriers 

both within and outside the District (Municipal Code sections 1412(b)(1), (c)(2)). For these 

reasons, the San Francisco transportation half-cent local sales and use tax for 

transportation is not impacted by the FAA's Policy and Procedures Concerning the Use of 

Airport Revenue. 

We have also confirmed that no portion of Bradley-Burns tax revenue, or any other tax 

revenue that is levied at SFO by San Mateo County and apportioned to the County of San 

Mateo and the City and County of San Francisco by the California Board of Equalization, 

is received by the San Francisco County Transportation Authority. 

Finally, I would like to note that the San Francisco County Transportation Authority did 

not receive any information directly from the FAA about this policy. We heard about it 

though the San Francisco Airport Director about one month ago. We subsequently 

notified other local transportation sales tax authorities across the State of California, most 

Plan, Fund, Deliver 

COMMISSIONERS 

Scott Wiener 

CHAIR 

Malia Cohen 

VICE CHMR 

John Avalos 

London Breed 

David Campos 

Julie Christensen 

Mark Farrell 

Jane Kim 

Eric Mar 

Katy Tang 

Norman Yee 

Tilly Chang 

EXE<-UTIVE OIREUOR 
Fong (cynthia.fong@sfcta.org or 41.5522.828) should you have any questions related to 

the Prop K half-cent local sales tax for transportation in this matter. 

Sincerely, 

Executive Director 

~ 

cc: Chair Wiener 

S. L. Bregman, J. Martin, J. Potter - SFO 

B. Rosenfeld, City & County of San Francisco Office of the Controller 

CF,AL,MEL