ATLANTA - Months after publicly committing to eliminate a jet fuel tax following a public battle between Delta Air Lines and the state’s lieutenant governor, Gov. Nathan Deal did just that Monday.
Deal issued an executive order suspending collection of the state’s 4 percent sales and use tax on jet fuel, effective on Aug. 1.
“Georgia imposes the fourth-highest fuel tax burden among states with major airport hubs, putting us at a daily disadvantage behind North Carolina, Texas, Florida and New York, among others. In fact, Georgia’s tax burden ranks only behind high-tax states California, Illinois and Michigan,” Deal said in a statement. “The annual economic impact of Georgia airports amounts to over $62 billion per year, and direct flights out of Hartsfield-Jackson Atlanta International Airport support nearly $11 billion in foreign investment and 42,000 jobs across the state.
The move comes months after the public battle between Atlanta-based Delta and Lt. Gov. Casey Cagle.
Shortly after the February school massacre in Parkland, Florida, Delta stopped offering discounts to members of the National Rifle Association.
The lieutenant governor, who oversees the State Senate, blasted the move and said he would kill tax cuts for Delta unless the airline reversed course. Days later, senators stripped the fuel tax exemption from a wider tax proposal.
After Gov. Deal signed the tax bill in March without the jet fuel tax cut, he said he would eliminate the tax by a different means and it was non-negotiable.
At the time, he put the blame for the battle on both Delta and the pressures of the lieutenant governor’s gubernatorial run.
Ironically, both the NRA and Deal eventually endorsed Cagle in his bid for the Republican nomination for governor, but he was defeated last week by Secretary of State Brian Kemp in the race to face Democrat Stacey Abrams in November.
In a news release, Deal said, “During the past eight years, we’ve taken similar steps to boost industries and economic growth around the state. In 2012, for example, we eliminated the energy sales tax on manufacturers. As a result, in the past five years, we’ve seen manufacturing jobs grow by 12.5 percent to a total of 395,807 in 2017. Just as removal of this tax burden spurred growth in the manufacturing arena, so will removal of the jet fuel tax burden in the airline industry.
“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. Providing tax relief to job creators will help us maintain our competitive advantage as a global hub for commerce now and in the future.”
In Fiscal Year 2018, the state sales tax on jet fuel amounted to more than $39 million in revenue.