From Paisley Gordon, Chair of the Charlotte Chamber of Commerce Aviation Committee:
Every license plate in North Carolina says “First in Flight.” We need to make sure our state remains true to that phrase by remaining competitive for interstate air business. The General Assembly needs to create a pathway forward for an exemption of jet fuel from sales tax.
So far in this legislative session, the House has adopted language that would extend an existing $2.5 million cap on the amount of sales tax that passenger air carriers pay in the state. The Senate exempted all interstate air business, including cargo, from the sales and use tax in their version of HB117, ensuring all air carriers are treated the same, which provides the best economic climate for the airline industry.
As the conference committee convenes around tax reform and economic incentives, we ask that they include this full exemption for jet fuel as a matter of economic development for the state.
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Jet fuel is a business input, and the state already has business input exemptions in place for railroads, manufacturing, and ocean-going vessels on their fuel purchases. Indeed, 35 states exclude commercial jet fuel from their sales tax base.
A sales tax exemption on jet fuel will ensure North Carolina remains competitive for American Airlines’ hub at CLT and FedEx’s hub in Greensboro, while creating increased air service opportunities at North Carolina’s 10 commercial airports.
Both the House and Senate have shown leadership on this issue this session, but in these final weeks we need them to the deliver the right message to air carriers: North Carolina is open for interstate air business with an exemption of jet fuel from the sales tax base.