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Floor Speech
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Mr. PADILLA. Madam President, I rise to introduce State and Local General Sales Tax Protection Act. This legislation would clarify congressional intent around a 1987 amendment to the Federal Aviation Administration's authorization regarding the use of local excise taxes on aviation fuel for airport purposes.
In 2014, the FAA implemented a policy change to require State and local governments to use general sales taxes collected on aviation fuel for airport purposes. This contradicted congressional intent clearly stated in the 1987 conference report and 29 years of practice, which applied this requirement only to local excise taxes on fuel and not to other taxes imposed by State and local governments.
This legislation would overturn the 2014 FAA policy and remove any ambiguity in Federal interpretation by distinguishing State and local sales tax measures of general application from aviation fuel excise taxes.
In my home State of California, local government sales taxes are voter-approved by a two-thirds margin for specific purposes. Diverting this money would be a violation of the State's constitution and the will of its voters. This 2014 FAA rulemaking, if enforced, is estimated to divert tens of millions of dollars away from voter-approved purposes like local transportation, first responders, education, and social programs every year. It is an assault on State and local control of general application sales tax measures.
The 2014 FAA rulemaking would also impose an unfunded mandate on States and local governments that would be required to implement a burdensome tracking system to segregate taxes on aviation fuel from other taxable sources.
Furthermore, in recognition of this error, the FAA included in its recommendations to Congress that the clarification provided in this legislation be included in an FAA reauthorization bill.
I look forward to working with my colleagues to enact the State and Local General Sales Tax Protection Act to protect every State and local government that have or will have general sales taxes that include aviation fuel. ______
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