The general aviation industry could start feeling a ripple effect from Congress's inaction on a short- or long-term FAA reauthorization bill.
The FAA no longer has the authority to collect an avgas tax and, according to the IRS Web page of frequently asked questions, the avgas excise tax should be reduced to 4.4 cents per gallon instead of the current 19.4 cents per gallon of avgas. Whether the savings will be noticed at the pump is unclear as fixed-base operators and dealers grapple with the consequences of inaction from Congress. Much of the fuel that is currently being sold at airports was produced before the tax lowered to 4.4 cents per gallon.
If the price of avgas lowers, don’t consider it a tax holiday. It could cost GA big in the end.
The tax decreased, effective July 23, because Congress did not pass an FAA reauthorization extension. Now, Congress is in recess until Sept. 6. This means that thousands of FAA employees remain furloughed, airport projects across the country are coming to a halt, many research-and-development projects are on hold, and the once-stable revenue stream that fed the Airport and Airway Trust Fund is questionable.
"It is disappointing that Congress adjourned before it could resolve the differences in its two bills," said Lorraine Howerton, AOPA vice president of legislative affairs, “thus causing the aviation trust fund to be in jeopardy."
The Airport and Airway Trust Fund is what funds the Airport Improvement Program; facilities and equipment; and research, engineering, and development. It funds airport projects ranging from safety enhancements to new air traffic control towers. It also funds research for projects vital to the future of the national air transportation system. Without contributing to this fund when pilots pay for their fuel, many critical projects aren't receiving adequate funding. That could lead pilots to notice another ripple, including safety issues at airports that won't receive funding to make needed improvements and repairs.