Senate passes “clean” FAA reauthorization bill, only aviation-related tax provisions

U.S. Senate passes “clean” FAA reauthorization bill

The Senate today passed H.R. 636, the legislative vehicle for reauthorizing Federal Aviation Administration (FAA) programs.


As passed by the Senate, the bill would extend through September 30, 2017, the following taxes and tax rates that are dedicated to the airport and airway trust fund: 

  • The imposition of tax at an increased rate on certain removals, entries, and sales of aviation gasoline and kerosene used in noncommercial aviation
  • The tax on amounts paid for taxable transportation of persons by air
  • The tax on amounts paid for taxable transportation of property by air
  • The exemption for aircraft in fractional ownership aircraft programs

The bill does not include tax provisions unrelated to aviation.


Earlier this year, the House passed a bill that would have extended the FAA trust fund taxes through March 31, 2017. Shortly thereafter, the Senate passed a bill that only extended FAA authorization and the trust fund taxes to July 15, 2016. The House ultimately approved that version of the bill. As a result, the airport and airway trust fund taxes currently are set to expire July 15, 2016. 

Recently, there have been some negotiations in the Senate regarding possibly adding to its version of the current FAA bill, tax provisions that are unrelated to aviation (such as extensions of certain expiring tax incentives relating to renewable energy). Ultimately, however, the tax title of the bill as passed today by the Senate is limited to provisions relating to the aviation trust fund taxes.  

What's next?

The House and Senate need to pass identical legislation before sending the legislation to the president. The House has not yet scheduled action on legislation extending the FAA programs and taxes.

KPMG observation

If the Senate bill becomes law in its current form, it is not clear whether or not there will be another legislative vehicle this year for other tax law changes (such as extensions of incentives that expire at the end of the year and technical corrections to previously enacted legislation). There are several IRS personnel-related bills pending consideration by the House, and whether any of these might serve as the vehicle for tax legislation is uncertain.

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