Speaking to the tightened state budget passed by the Republican-controlled Legislature, state Rep. Eddie Rodriguez said outnumbered Democrats tried to illuminate tax loopholes and exemptions that, if closed, would yield badly needed state revenue.
The Austin Democrat told the Central Texas Democratic Forum on June 22: "You all would be very, very surprised to know what we exempt in the state of Texas." For example, he said, "jet fuel is exempt. We are the only state, I think, that exempts that."
Rodriguez’s chief of staff, Nate Walker, later said Rodriguez was referring to the fact Texas does not levy a motor fuels tax on jet fuel. Indeed, R.J. DeSilva, spokesman for the state comptroller’s office, pointed us to sections of the motor fuels tax code that exempt all gas for aircraft delivered into or sold from a storage facility of a licensed aviation fuel dealer from the state’s gas or motor fuels tax. A February report by State Comptroller Susan Combs pegs the value of the gas tax exemption for aviation at $4.5 million for the fiscal year that ends Aug. 31. DeSilva said the value of the exemption for diesel fuel used in airplanes is not calculated.
DeSilva said he didn’t know if Texas is the only state with such provisions.
Researching that aspect, we turned to the Washington-based Federation of Tax Administrators, which guided us to the Maryland-based Airline Owners and Pilots Association, which pointed us to a Phoenix expert on aviation costs.
Nel Stubbs of Conklin & de Decker, which describes itself as enabling customers to make more informed decisions when dealing with the purchase and operation of aircraft, told us by email that Texas and three other states — Connecticut, Delaware and Rhode Island — exempt jet fuel from their respective motor fuels taxes. Other states, she said, refund some or all of an airline’s motor fuels’ tax payments. Stubbs defined jet fuel as a type of aviation fuel designed for aircraft powered by gas-turbine engines.
Rodriguez’s office, which we alerted to Stubbs’ analysis, passed along a 2008 report by Stubbs illuminating variations in jet-fuel taxation. California, for instance, levies a jet-fuel tax of two cents per gallon, though airlines are exempt. Similarly, commercial aircraft may qualify for partial exemptions from Florida’s tax of 6.9 cents per gallon, according to the report, while airlines fueling in New York are entitled to refunds of their payments of 6.5 cents a gallon.
Stubbs, saying she’s tracked state-by-state differences since the late 1980s, added in an interview: "We’re 50 little kingdoms out there. You can never say, ‘We’re the only state that does this,’ because you’d be wrong. You can never say, ‘All states do something (either).’ They’re all different." Finally, she forwarded a chart showing variations in tax methods showing too that 11 states charge a sales tax, yet no motor fuels tax, on jet fuel.
We circled back to Rodriguez, who said he had assumed Texas was the only state that doesn’t levy the motor fuels tax on jet fuel because the exemption struck him as weird. Besides, he reminded, Texas still is one of the few states with the exemption.
We rate his statement False.