Clayton County will receive most of the more than $28 million the state has set aside to partially reimburse local governments for the loss of jet fuel sales tax money.
Clayton County Commission Chairman Jeff Turner said the grant will amount to about three years of what county government would otherwise collect in taxes on jet fuel sales at Hartsfield-Jackson International Airport.
The Atlanta Journal-Constitution reported Friday that Georgia Department of Revenue officials put out a bulletin telling vendors to stop collecting most local sales taxes on jet fuel as of July 1. The department cited federal regulations saying local sales taxes on jet fuel must be used at airports for things such as facility improvements.
Delta Air Lines is expected to be the biggest beneficiary of the decision, although other airlines and cargo companies will save money as well. Total savings to those businesses are expected to be more than $20 million a year.
Gov. Nathan Deal said Monday that the move by the state would help ensure Georgia doesn’t lose federal transportation funding in the future because it didn’t comply with Federal Aviation Administration regulations.
“Georgia has taken critical action to ensure our federal funding is not jeopardized and local governments that rely upon local jet fuel sales tax are made whole,” Deal said.
Clayton County, the home of Hartsfield-Jackson, will receive almost $27 million of the $28.3 million the state is allocating to reimburse counties.
Commissioners there are expected to vote on accepting the money Tuesday.
“We are not going to fight it, nor are we going to contest his signing of the executive order” to end collections, Turner said. “I see that as a big step on the governor’s behalf. He could have just signed the order.
“It is not what we would have chosen. We would have chosen to collect $9 million (in collections) for several years,” he added. “Some money is better than no money.”
The move comes three months after state lawmakers killed a broader fuel tax break after Delta ended a discount program for National Rifle Association members. Delta made the announcement a few weeks after a mass shooting Feb. 14 at a Florida high school.
Clayton and its school district split $18 million annually from fuel taxes levied at Hartsfield-Jackson. But the FAA last year indicated it could begin enforcing a policy it upheld in a 2014 decision prohibiting the use of taxes collected at an airport for any purpose other than for the airport.
Deal had proposed early in the 2018 session that the state reinstitute a state and local sales tax exemption on jet fuel, which would have saved airlines, cargo companies and others more than $50 million a year.
However, once Delta broke with the NRA, Lt. Gov. Casey Cagle, a leading Republican candidate for governor, promised to kill the exemption. He found heavy support among GOP lawmakers, who hold an overwhelming majority in the General Assembly and generally back the NRA’s positions.
Cagle, currently in a runoff campaign for the Republican nomination, said Monday: “My position on the underlying issue remains the same. That said, the issue at hand is compliance with federal law, and Governor Deal has been clear that we have no other option.”
Any sales taxes approved before Dec. 30, 1987, would still be collected on jet fuel, as would the state sales tax. For many counties, that would cut the local rate on jet fuel to 1 percent. Clayton would have no local sales tax on jet fuel.
Delta on Friday promised to help local school districts affected by the latest tax cut. Clayton County Public Schools, which won’t receive any of the state grant money, is counting on help from Delta.