49 U.S.C. § 40116 — State taxation
submitted 32 years ago by Pub. L. 103-272 to r/title-49-TRANSPORTATION · 961 words · no verdicts yet
States generally cannot tax air travelers, tickets, or airline revenue from flying. A state may only tax a flight that takes off or lands there. States can still charge normal business taxes and airport landing or service fees.
(a) Definition. In this section, "State" also means the District of Columbia, a U.S. territory or possession, and a joint authority formed by at least two states.
(b) Prohibitions. Except as allowed under subsection (c) or section 40117, a state, its political subdivisions, or anyone who bought or leased an airport under section 47134 cannot tax or charge fees on (1) a person traveling by air, (2) the transportation of that person, (3) the sale of air transportation, or (4) the money earned from that travel or transportation.
(c) Aircraft Taking Off or Landing in State. A state or its subdivision can tax a commercial flight, or an activity or service on it, only if that flight actually takes off or lands there.
(d) Unreasonable Burdens and Discrimination Against Interstate Commerce. (1) This subsection defines "air carrier transportation property" (property an airline owns or uses), "assessment" (a property-tax valuation), "assessment jurisdiction" (the area used to value property for tax), and "commercial and industrial property" (business property other than transportation property or farmland/timberland). (2)(A) A state, subdivision, or authority may not — because it would unfairly burden interstate commerce — (i) value airline property at a higher share of its true market value than similar business property nearby; (ii) tax based on a valuation banned under (i); (iii) tax airline property at a higher rate than similar business property in the area; (iv) after August 23, 1994, charge a tax or fee aimed only at businesses at a commercial airport unless the money goes entirely to airport or aviation purposes; or (v), unless section 47133 allows it, charge a new tax or fee on airport businesses that isn't generally charged on sales or services elsewhere, unless it's entirely for airport or aviation purposes. (B) This ban doesn't cover an "in lieu" tax that is fully used for airport and aviation purposes.
(e) Other Allowable Taxes and Charges. Except as limited by subsection (d), a state or subdivision can still (1) charge other taxes — property, net income, franchise, and sales/use taxes — and (2) charge reasonable rent, landing fees, and other service charges to aircraft operators using its own airport.
(f) Pay of Air Carrier Employees. (1) This subsection defines "pay" as money earned for services; "State" as a U.S. state, D.C., or a territory/possession; and treats an employee as having earned 50 percent of their pay in a state if more than half their scheduled flight time that year was in that state. (2) The pay of an employee of an air carrier who has regularly assigned duties on aircraft in at least two States is subject to income tax laws only in (A) the State or political subdivision where the employee lives, or (B) the State or political subdivision where the employee earns more than 50 percent of the pay received from the carrier. (3) Pay an airline gives an employee while on authorized union leave is taxed only by (A) the state where the employee lives, or (B) the state where more than half the employee's flight time would have been, had they been working their normal flight duties full time.
In this section, “State” includes the District of Columbia, a territory or possession of the United States, and a political authority of at least 2 States.
Except as provided in subsection (c) of this section and section 40117 of this title, a State, a political subdivision of a State, and any person that has purchased or leased an airport under section 47134 of this title may not levy or collect a tax, fee, head charge, or other charge on—
an individual traveling in air commerce;
the transportation of an individual traveling in air commerce;
the sale of air transportation; or
the gross receipts from that air commerce or transportation.
A State or political subdivision of a State may levy or collect a tax on or related to a flight of a commercial aircraft or an activity or service on the aircraft only if the aircraft takes off or lands in the State or political subdivision as part of the flight.
In this subsection—
“air carrier transportation property” means property (as defined by the Secretary of Transportation) that an air carrier providing air transportation owns or uses.
“assessment” means valuation for a property tax levied by a taxing district.
“assessment jurisdiction” means a geographical area in a State used in determining the assessed value of property for ad valorem taxation.
“commercial and industrial property” means property (except transportation property and land used primarily for agriculture or timber growing) devoted to a commercial or industrial use and subject to a property tax levy.
A State, political subdivision of a State, or authority acting for a State or political subdivision may not do any of the following acts because those acts unreasonably burden and discriminate against interstate commerce:
assess air carrier transportation property at a value that has a higher ratio to the true market value of the property than the ratio that the assessed value of other commercial and industrial property of the same type in the same assessment jurisdiction has to the true market value of the other commercial and industrial property.
levy or collect a tax on an assessment that may not be made under clause (i) of this subparagraph.
levy or collect an ad valorem property tax on air carrier transportation property at a tax rate greater than the tax rate applicable to commercial and industrial property in the same assessment jurisdiction.
levy or collect a tax, fee, or charge, first taking effect after August 23, 1994, exclusively upon any business located at a commercial service airport or operating as a permittee of such an airport other than a tax, fee, or charge wholly utilized for airport or aeronautical purposes.
except as otherwise provided under section 47133, levy or collect a tax, fee, or charge, first taking effect after the date of enactment of this clause, upon any business located at a commercial service airport or operating as a permittee of such an airport that is not generally imposed on sales or services by that State, political subdivision, or authority unless wholly utilized for airport or aeronautical purposes.
Subparagraph (A) of this paragraph does not apply to an in lieu tax completely used for airport and aeronautical purposes.
Except as provided in subsection (d) of this section, a State or political subdivision of a State may levy or collect—
taxes (except those taxes enumerated in subsection (b) of this section), including property taxes, net income taxes, franchise taxes, and sales or use taxes on the sale of goods or services; and
reasonable rental charges, landing fees, and other service charges from aircraft operators for using airport facilities of an airport owned or operated by that State or subdivision.
In this subsection—
“pay” means money received by an employee for services.
“State” means a State of the United States, the District of Columbia, and a territory or possession of the United States.
an employee is deemed to have earned 50 percent of the employee’s pay in a State or political subdivision of a State in which the scheduled flight time of the employee in the State or subdivision is more than 50 percent of the total scheduled flight time of the employee when employed during the calendar year.
The pay of an employee of an air carrier having regularly assigned duties on aircraft in at least 2 States is subject to the income tax laws of only the following:
the State or political subdivision of the State that is the residence of the employee.
the State or political subdivision of the State in which the employee earns more than 50 percent of the pay received by the employee from the carrier.
Compensation paid by an air carrier to an employee described in subsection (a) in connection with such employee’s authorized leave or other authorized absence from regular duties on the carrier’s aircraft in order to perform services on behalf of the employee’s airline union shall be subject to the income tax laws of only the following:
The State or political subdivision of the State that is the residence of the employee.
The State or political subdivision of the State in which the employee’s scheduled flight time would have been more than 50 percent of the employee’s total scheduled flight time for the calendar year had the employee been engaged full time in the performance of regularly assigned duties on the carrier’s aircraft.
Source credit: (Pub. L. 103–272, § 1(e), July 5, 1994, 108 Stat. 1111; Pub. L. 103–305, title I, § 112(e), title II, § 208, Aug. 23, 1994, 108 Stat. 1576, 1588; Pub. L. 104–264, title I, § 149(b), Oct. 9, 1996, 110 Stat. 3226; Pub. L. 104–287, § 5(66), Oct. 11, 1996, 110 Stat. 3395; Pub. L. 115–254, div. B, title I, § 159(a), Oct. 5, 2018, 132 Stat. 3220.)
- 1994Enacted · Pub. L. 103-272 · 108 Stat. 1111
- 1994Amended · Pub. L. 103-305 · 108 Stat. 1576, 1588
- 1996Amended · Pub. L. 104-264 · 110 Stat. 3226
- 1996Amended · Pub. L. 104-287 · 110 Stat. 3395
- 2018Amended · Pub. L. 115-254 · 132 Stat. 3220
A history note hasn’t been published yet. The record shows enactment by Pub. L. 103-272 on 1994-07-05.
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