NRA-Be Darned: Delta Gets Georgia Fuel Tax Break After All (1)

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

By Chris Marr

Delta Air Lines will get a break from paying taxes on fuel purchases in Georgia, despite furor from gun-rights advocates in the state Legislature after Delta ended an NRA member discount earlier this year.

Georgia Gov. Nathan Deal (R) issued an executive order July 30, instructing the state’s revenue department to halt collection of the state’s aviation fuel tax beginning Aug. 1. The governor had advocated for legislation to eliminate the tax during the 2018 legislative session, which ended in March. Deal is finishing his second and final term as governor in 2018.

State law allows the governor to order suspension of a tax through the next meeting of the Legislature, which is scheduled to reconvene in January.

The tax accounted for $39 million of state revenue in fiscal 2018, the governor’s office said. The bulk of the savings will go to Delta, which has its corporate headquarters and main flight hub in Atlanta. The airline is also the city’s largest employer.

Georgia’s 4 percent sales tax on jet fuel puts it at a competitive disadvantage to the many states that charge less or in some cases zero tax on jet fuel, according to the governor’s order. The state imposes the fourth highest jet-fuel tax burden, behind only Illinois, California, and Michigan, the order said.

“In order to remain the No. 1 state in which to do business, attract more companies to our communities and provide more jobs for our growing population, it is crucial to maintain and preserve a pro-business climate,” Deal said in a written statement July 30.

Pro-NRA Senators Killed Proposal

Republican state senators including Lt. Gov. Casey Cagle (R), who presides over the Senate, killed the tax-break proposal in late February after Delta ended a discount program for members of the National Rifle Association. Cagle’s move won praise from gun-rights advocates and perhaps helped him win the NRA’s endorsement in his run for Georgia governor.

Whether coincidentally or not, Deal’s order comes less than a week after Cagle’s run for governor ended. Brian Kemp, Georgia’s current secretary of state and President Donald Trump’s pick in the race, won the GOP nomination for governor in a July 24 primary runoff vote. Deal had endorsed Cagle in the race.

Deal had criticized the public tone of the debate at a Feb. 28 press conference, saying Georgia officials weren’t elected to “give the late-night talk show hosts fodder for their monologues.”

The jet fuel tax break was originally part of the state’s larger income tax overhaul, which Deal signed into law in March. That legislation lowered corporate and individual income tax rates. The estimated cuts of $5 billion over five years are expected to slightly more than offset the revenue increase that Georgia would otherwise receive due to the federal tax changes enacted in December 2017 (Pub. L. No. 115-97).

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