Michigan lawmakers urged not to raise aviation fuel taxes

December 4, 2008

AOPA is asking Michigan legislators not to increase aviation fuel taxes by changing the tax calculation from three cents per gallon to 3 percent of the wholesale price of a gallon. At current fuel prices, the proposed calculation method could double the amount of fuel tax pilots pay.

In a Dec. 1 letter to the chairman of the House Committee on Transportation, AOPA warned that increasing the fuel tax, which is levied in addition to a 6-percent sales tax on aviation fuel, aircraft, and aircraft parts, would further increase the cost of flying at a time when aviation is already suffering from high fuel prices and a slumping economy. Additionally, higher taxes could hurt the state’s transportation industry and economy by pushing business to neighboring states with more aviation-friendly policies. The letter also asked legislators to consider alternative means of raising revenues before upping the fuel tax, particularly in light of the current economic environment for general aviation.

AOPA has been closely monitoring Michigan’s aviation tax legislation, and AOPA has testified at hearings held by the state’s Transportation Funding Task Force. That task force presented several funding options to lawmakers, including the current tax increase proposal.

“Raising fuel taxes at a time when the general aviation industry is experiencing a financial crunch could stifle business more than it raises revenue,” said AOPA Vice President of Regional Affairs Greg Pecoraro. “This is not the only way to manage transportation revenues, and we will continue to oppose this measure and push for less burdensome alternatives.”

The Michigan House Committee on Transportation was expected to review the legislation, H.B. 6751, before sending it to the Senate next week.

AOPA members are urged to contact their representatives and senators to express their opposition to the measure and explain how it would impact their flying and businesses.