Time To Close Corporate Tax Loophole For Airlines' Jet Fuel, Union County Legislator Says

By ERIC KIEFER (Patch Staff)

Newark, NJ - There’s a loophole that allows airline corporations to avoid paying tens of millions of dollars in jet fuel taxes in New York and New Jersey… but it hopefully won’t be around for much longer, two state senators say.

During a news conference at Newark International Airport on Monday, New Jersey’s Raymond Lesniak and New York’s Jose Peralta revealed that they have introduced a pair of bills in their respective states that aim to close the alleged loopholes.

Lesniak, Senator for Legislative District 20 represents Elizabeth, Hillside, Roselle and Union in Union County.

“The tax at issue is an excise tax to all jet fuel consumed by commercial passenger aircraft,” SEIU Local 32BJ explained in a news release supporting the senators’ bills. “Only New York, New Jersey and Washington limit the jet fuel excise tax to fuel burned within their state borders. All fuel burned beyond their borders is exempt from the excise tax, known in New York as the Petroleum Business Tax or PBT.”

Taxes raised from those bills would be available to New York and New Jersey for airport upkeep and renovation projects – a burden that now falls upon taxpayers, 32BJ leaders stated.

The union represents workers that include Newark Airport employees.

“This bill is long overdue,” Lesniak said during Monday’s news conference. “There are no free riders on airplanes and we should not be giving the airlines a free ride at Newark, LaGuardia and JFK airports. The airlines claim they should get these breaks because they are economic drivers in the state, but then they use low-road contractors to employ thousands of workers who are making poverty wages.”

• See related article: United Airlines Announces Record Profit, Workers Protest Low Wages

“The time has come for us to catch up to the rest of the country, and close this tax loophole,” Peralta agreed. “Airlines are very profitable, and they don’t need these huge tax breaks as it relates to the jet fuel they need to operate. The time has come for the airlines to stop using contractors who pay poverty wages to airport workers, who all too often must rely on public assistance to make ends meet, to just get by.”

• See related article: Newark Airport Workers Plan To Strike, Will Join Others Nationwide

A 2014 analysis conducted by the UNITE HERE union stated that a jet fuel tax loophole – which only taxes airlines for jet fuel they consume while taxiing and during takeoff – saved NJ commercial airlines $42 million in 2013, NJ.com reported.

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Photo courtesy of SEUI 32BJ