Regulations and Government
Bill proposes to detangle fuel-tax collection system
The Senate Finance Committee has approved a bill that would repeal the onerous “fuel fraud” provision enacted into law as part of the 2005 Highway Bill.

The Senate Finance Committee has approved a bill that would repeal the onerous “fuel fraud” provision enacted into law as part of the 2005 Highway Bill. Although the law dealt with surface transportation, it contained a provision that aviation jet fuel taxes be collected at the highway diesel fuel rate of 24.4 cents per gallon as opposed to the aviation rate of 21.9 cents per gallon.

The provision was designed to guard against alleged fuel fraud from highway truck operators purchasing aviation fuel for highway use to avoid paying the higher tax on highway diesel fuel. It also directed that all taxes on the sale of aviation fuel be deposited initially in the Highway Trust Fund instead of the Airport and Airway Trust Fund.