From an editorial Friday in the Fayetteville Observer:
Jet fuel in North Carolina is exempt from sales taxes. Airlines save millions by filling up in this state. Our tax breaks are the second-most generous, after California’s, according to one recent study. Those exemptions are set to expire at year’s end.
A regional business development group from Charlotte is pushing the General Assembly to keep tax breaks in place. They point to American Airlines, which operates a major hub in Charlotte and stands to lose $17 million annually if it had to pay taxes on jet fuel. A loss of flights could have a devastating effect on the regional economy.
Fayetteville’s smaller airport doesn’t serve as a hub for anyone and is 143 miles from Charlotte-Douglas. But Airport Director Bradley Whited said the pinch could be felt here. American’s local flight service relies on the Charlotte hub.
Whited also said revoking the fuel tax exemption would put pressure on the economics of air travel. Medium and smaller airports might see fewer flights and slow growth, which could dampen job creation across the state.
Legislators do need to find new revenue sources. But trying to tap this one could be like slaying the golden goose.