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S.F. No. 303 - Aviation Taxes Modifications (Delete-Everything Amendment A-6)
 
Author: Senator Ann H. Rest
 
Prepared By: Krista Boyd, Senate Fiscal Analyst (651/296-7681)
 
Date: April 3, 2013



 

Section 1 increases the excise tax on jet fuel and special fuel used as a substitute for aviation gasoline from five cents per gallon to 15 cents per gallon.  (The five cent per gallon tax on aviation gasoline is not changed.)

Section 2 maintains the current rate of fuel tax (five cents per gallon) for jet fuel or special fuel purchased by an airline company engaged in air commerce in Minnesota that is required to pay air flight property tax.

Section 3 cross-references the new language in section 4 relating to nonrefundable fuel tax in the graduated refund section of statutes.

Section 4 provides that anyone who pays tax on jet fuel or special fuel under section 1 (at the new 15 cent per gallon rate) is not entitled to a graduated tax refund.

Section 5 exempts from the general sales tax certain air flight equipment, aircraft parts, and associated installation charges.

Section 6 provides that revenues from the general sales tax collected from the taxable sale or purchase of an aircraft must be deposited in the state airports fund.

Section 7 changes the aircraft registration tax rate from the current system (one percent of value, subject to a minimum tax) to a rate derived from a statutory graduated schedule based on manufacturer's list price.

Section 8 eliminates the element of depreciation from calculation of an aircraft's base price for registration tax purposes.

Section 9 updates statutory references relating to the state airports fund.

Section 10 requires the Commissioner of Transportation, in consultation with the Commissioner of Revenue, to report to the legislative transportation committees every four years beginning in 2016, concerning revenues to and expenditures/transfers from the state airports fund, as well as any recommended statutory changes to ensure the future adequacy of the state airports fund.

Section 11 provides effective dates as follows:

  • Fuel tax provisions (sections 1 to 4) are effective July 1, 2014.
  • Sales tax provisions (sections 5 and 6) are effective July 1, 2013.
  • Aircraft registration tax provisions (sections 7 to 9) are effective July 1, 2014.
  • Reporting requirement (section 10) is effective July 1, 2013.

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