6. OTHER STATE TAXES

6.01 State Taxes on Fuel

Every state appears to have some kind of tax on fuel. Many states have a separate tax on fuel. In other states, fuel is taxable under the general sales and use tax laws.

The laws may impose different rates of tax on avgas and jet fuel.

The Supreme Court has held that the commerce clause does not prohibit the imposition of an unapportioned sales tax on aviation fuel, even where the fuel will be primarily consumed outside of the state.1 The Court has also held that such tax is not prohibited by federal legislation, in particular, the Anti-Head Tax Act.2 Nevertheless, some states do not tax the portion of fuel used outside of the state.

Although there is not much that can be done to avoid this tax, the fuel tax can be an important factor in deciding where to base an aircraft.

  1. United Air Lines, Inc. v. Mahin 410 U.S. 623 (1973); Wardair Canada v. Florida Dept. of Revenue, 477 U.S. 1 (1986).
  2. Wardair Canada v. Florida Dept. of Revenue, 477 U.S. 1 (1986).