Senate passes FAA authorization bill, containing aviation-related tax provisions

Senate passes FAA authorization bill

The U.S. Senate today passed, 89 to 4, a bill to reauthorize Federal Aviation Administration (FAA) programs. The House passed the legislation on July 11, 2016.

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The airport and airway trust fund taxes currently are set to expire July 15, 2016. The FAA reauthorization bill (H.R. 636) would extend through September 30, 2017, the following taxes and tax rates that are dedicated to the airport and airway trust fund: 

  • The imposition of tax at an increased rate on certain removals, entries, and sales of aviation gasoline and kerosene used in noncommercial aviation 
  • The tax on amounts paid for taxable transportation of persons by air 
  • The tax on amounts paid for taxable transportation of property by air 
  • The exemption for aircraft in fractional ownership aircraft programs

The bill does not include tax provisions unrelated to aviation.

The legislation will now be enrolled and sent to the White House for action by the president. 

KPMG observation

With congressional passage of the FAA bill, it is uncertain whether there could be another “legislative vehicle” for other tax law changes this year. For instance, a number of tax preferences—certain “tax extenders”—will expire in 2016, if not further extended. Also, technical corrections to previously enacted legislation are pending.

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