 June 25, 2003
The first bill would reduce the number of Alaskans paying the segment tax for air travel to rural airports. Under current law, passengers are exempt from paying the segment tax if the airport they travel to has less
"It is patently unfair to not consider an airport rural if there is no other way to access it other than by air. The mileage should not make a difference," said Murkowski. Murkowski is proposing to add an exemption for airports "not connected by paved road to another airport" from the segment tax. "The segment tax should not apply if there are no paved roads that can be used as an alternative to flying. In the Lower 48 passengers have an alternative to paying the tax, they can drive. Here they can't," said Murkowski. "There is no reason that villagers in Angoon should pay the tax to fly into Juneau, or that villagers in Atmautluak should pay the tax to fly into Bethel just to get medicine or food. Alaskans are already paying too much when they fly the "milkrun" from Anchorage to Juneau or from Juneau to Seattle. They should not face additional taxes when flying on the last leg to their villages." The second bill would exempt seaplane passengers from having to pay the 7.5 percent ticket tax. Under current tax law floatplane passengers are required to pay an excise for travel on scheduled floatplane flights - a tax not charged for floatplane charters. "In nearly all cases floatplanes fly at low altitudes, 1,000 to 1,500 feet so they never enter controlled airspace. They are not tracked by FAA personnel and they land on water, not at costly airport facilities, so there is little or no cost to the government for maintaining facilities used by the planes. Admittedly floatplane operators may benefit slightly from FAA programs, but they already pay a higher fuel tax, so they do contribute equitably to the cost of the aviation system," said Murkowski. The rural segment tax exemption would save Alaskans about $1 million a year, while the floatplane tax elimination would save under $1 million a year, according to the Congressional Joint Tax Committee. Murkowski said the changes would not have a significant impact on the federal treasury, but would have a big impact on rural Alaskans. "Over the course of a year a villager may have to fly into Bethel, or Juneau or Ketchikan on dozens of occasions for spare parts or to attend doctor visits. Such a passenger on a 70-mile trip is not taxing the nation's aviation system nearly as much as a cross country vacationer flying from New York to Los Angeles, nor do they have an alternative way of getting there. They shouldn't be charged the same," she said. The measures were assigned
to the Senate Finance Committee for review.
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