•· 

The Honorable Slade Gorton 

united states Senate 

Washington, DC 20510 

Dear Senator Gorton: 

JAN I I 18SO 

t/ll)<io 

Thank you for your letter of October 31, 1989, seeking 

clarification regarding the ability of (1) a locality, and (2) 

a State, to impose a sales tax on aviation fuel with the tax 

proceeds being applied to fund human services, a non-airport or 

non-aviation purpose. 

1. Local Aviation Fuel Tax: 

Any action by_ ~ local government to impose a sales tax on \\ 

aviation fuel sold on an airport of which it is a sponsor, so 

it can use the monies derived from the tax to support non-aviation activities such as human services, would be 'j 

inconsistent with Federal g-rant obliga-tions undertaken by the 

public sponsor of evel:"y Federally funded air]?Ort upon which the 

tax is collected. Monies 9enerated from such a ta)!: would have4fl 

tq .l:!e expended by the sponsor Jo~. the ". • • capital .or operatin<f' 

¢().sts of the airport, t.helocal lirport system, or other local 

facilities which are owned or operated by the owner or operator of the airport and directly and substantially related to the 

actual air transportation of passengers or property ••• ", 

within the meaning of Section 511(a)(12) of the Airport and 

Airway Improvement Act of 1982 ( 11 1982 Airport Act"), codified 

at 49 u.s.c. App. Section 2210. This section sets forth 

requirements which must be met by sponsors before airport projects contained in project grant applications may be 

approved by the secretary of Transportation. Failure to meet 

the enumerated requirements can jeopardize continued Federal 

funding of airport and noise abatement projects at these 

airports. 

Following the adoption of section 5ll(a)(12) in 1982, some 

controversy arose concerning whether certain taxes on aviation 

fuel would be covered by the restrictive language. Therefore, 

in order to avoid future confusion over local taxes on aviation 

fuel, Congress amended section 511(a) (12) of the 1982 Airport 

Act on December 30, 1987. In the Airport and Airway Safety and 

capacity_ Expansion Act of 1987 (Pub. L. No. 100-223), 
2 

Congress added the phrase, " •••.. An~ C!.nY lOCC!.l taxes on <!.ViatioQ 

fuel (other than taxes in effect ~~.DeceJIIber 30, 19!!.7,,)" to · section 511(a) (12). Prior to the f987 amendment, this section 

read: 

••• ·an revenues generated by the airport, if it is a 

public airport, will be expended for the capital or 

operating costs of the airport •••• · 

Subsequent to December 30, 1987, however, this section read: 

all revenues generatedby the airport, if it is a l 

public airport,· and <!.ny local· taxes. on aviation .. fuel&' 

(other than taxes .in· effect. on. December 30, 1987!1! 

will be expended for the capital or operating costs of 

the airport •.• • • (emphasis supplied). 

In summary, since human services are not airport-related, or 

related to other local facilities owned or operated by the 

owner or operator of the airport which are directly and 

substantially related to the actual air transportation of 

passengers or property, local governments may not utilize 

monies generated from such a tax for this purpose without · placing in jeopardy its present and future Federal funding of 

airport projects. 

2. State Aviation Fuel Tax: 

The S.:tate of Washington may not impose a State sales tax on ·\· aviation fuel sold on an airport, when the monies derived from 

the tax would be used to fund non-aviation activities such as 

human services, without jeopardizing the grant compliance 

·status of Federally funded airports in the State of 

Washington. Monies from such a tax would have to be spent to 

support either (1) the"··· capital or operating costs of the 

airport, t.he local airport system, or other local facilities 

which are owned t>r operated by the owner or operator of the 

airport and directly and substantially related to the actual 

air transportation of passengers or property ••• " within." the 

meaning of section Sll(a) (12); or (2) a 11Statli!. avi<!.tion, 

program" 4Pr "noise mitigation" measures on or off the alrport, within the meaning of Section 511(d), 49 u.s.c. App. Section 

2210(d). 

Section 1113 of the Federal Aviation Act of 1958 ("FAAct") 

expressly permits states to impose such taxes. 49 u.s.c. App. 

Section 1513(b). [See, wardair Canada, Inc. v. Florida 

Department of Revenue, 477 u.s. 1, 106 s.ct. 2369, 2372 ·(1986), 

Rocky Mountain Airways, In.c. v. Pitkin county, 674 F. Supp. 312 

(D. Colo. 1987), and In Re Menier, 59 B.R. 588 (Bankr. N.D. 

Ohio 1986). 
section 1113, entitled, "State taxation of air commerce," 

states in subsection (b): 

Except as provided for in subsection (d) of this 

section, nothing in this section shall prohibit a 

State (or political subdivision thereof ••• ) from the 

levy or collection of taxes other than those 

enumerated in subsection (a) of this section, 

including ••• sales or use taxes on the sale of goods 

or services .... 

3 

. Even though 49 u.s.c •. App. Section 1513(b) expressly permits 

states to enact a state aviation fuel tax, we find, however, 

that Section Sll(a) (12) applies to State taxes on aviation 

fuel. If it were otherwise, Section Sll(d) of the 1982 Airport Act.would be rendered meaningless. 

Amended Section Sll(d) of the Airport Act, codified at 49 

u.s.c. App. Section 2210(d), states: 

Nothing in subsecti.on (a) (12) 'of this section shall 

preclude the use of state taxes on aviation fuel to 

support a State aviation program or preclude use of 

airport revenue on or off the airport for noise 

mitigation purposes. 

Section Sll(d) expands the types of uses to which state tax 

monies derived from aviation fuel taxes may be put as set forth 

in Section Sll(a) (12), to include "aviation program[s]" and 

"noise mitigation [measures]" on or off the airport. In other 

words, the limitations of Section 5ll(a)(l2) are expanded by 

Section Sll(d) to include additional legitimate uses for monies 

derived from a State aviation fuel tax. It follows that 

Congress, having expressly permit;ted two spe!:;!J'+!?-1.l!fl~!O"Of 

avf.ation fuel tax monies, necef.lsarily excluCled"o'tlie£._; · non-airport-related purpos~s. 

Thank you again for your letter. If you have any further 

questions, please let us know. 

An identical letter has been sent to Senator Slade Gorton. 

Sincerely, 

C:. ~ ·-<~.·· $. ·< 

Gregory s. Walden 

Chief Counsel 

Enclosure 

Transmitted Correspondence 

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