House Bill 193

Chair's Name: Larry O�Neal

Committee: Ways & Means

House Sponsor: Mark Burkhalter

HB 193 extends the existing sales tax exemption for sales or use of jet fuel to or by qualifying airlines.  Currently, qualified airlines operating in Georgia pay the first $15 million in state sales tax plus applicable local sales taxes on purchases or use of jet fuel.  Thereafter, the purchase or use of jet fuel is exempt from state and local sales tax except for local option sales taxes for educational purposes which become effective before July 1, 2005.  This exemption is currently set to expire on July 1, 2007.   HB 193 would extend this exemption to July 1, 2009.

The committee substitute received a Do Pass recommendation from the Ways & Means Committee and comes to the House Floor under the Structured Rule. 

Chairman O�Neal�s opinion of this legislation:

WHAT PROBLEM/OPPORTUNITY DOES THIS LEGISLATION ADDRESS?

HB 193 extends the existing sales tax exemption for sales or use of jet fuel to or by qualifying airlines above the first $15 million in purchases or use of jet fuel.  This exemption is currently set to expire on July 1, 2007.   HB 193 would extend this exemption to July 1, 2009.

WHAT IS THE DRIVING FORCE BEHIND THIS LEGISLATION?

To provide Delta with sales tax relief by placing a $15 million cap on jet fuel sales taxes.

THIS LEGISLATION:

• Reduces the Tax Burden on our Citizens:

This bill will reduce the fuel tax burden on one of Georgia�s largest employers.

Senate Changes:

The Senate replaced the tax cap of $15 million/year to a formula method of the first 1.80% of 4% sales tax which results in the equivalent of the existing cap. Because this change does not alter the net effect of the bill or existing law, Representative Burkhalter will likely move to agree, though the bill was structured.