The Charlotte Regional Partnership is pushing legislators to continue a tax break on jet fuel that’s set to expire at the beginning of next year, potentially costing airlines millions of dollars.
Under state law, airlines operating in North Carolina are refunded for fuel taxes they pay beyond $2.5 million a year. If the sales tax exemption expires, American Airlines estimates it would pay $17 million annually in fuel sales taxes statewide.
The company, which operates its second-busiest hub in Charlotte with about 650 departures a day, supports exempting jet fuel from sales taxes.
The Charlotte Regional Partnership said in a message to members Monday that higher jet fuel tax will hurt North Carolina’s aviation industry.
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“This will put Charlotte and the state at a serious competitive disadvantage in trying to expand air services, especially compared to neighboring states such as Virginia and South Carolina, which already have lower jet fuel tax rates than North Carolina,” wrote Ronnie Bryant, CEO of the partnership.
He said the partnership’s board of directors has passed a resolution supporting an exemption for jet fuel and urged members to contact state legislators and voice their support.
Charlotte is the sixth-busiest airport in the nation, measured by takeoffs and landings. Bryant pointed to the importance of Charlotte’s nonstop air service to attracting businesses to relocate.
“Securing a jet fuel tax exemption will strengthen future efforts to attract such companies to the area and maintain our economic momentum,” Bryant wrote.
While Bryant and aviation officials have supported the jet fuel tax exemption, other groups have opposed the tax break. Unite Here, a union that represents some airport workers, recently began a campaign to spotlight jet fuel tax breaks and their cost to states.
The group contends that such tax exemptions are a drain on resources and unfair, especially because ordinary drivers face taxes on gasoline for their cars.