Excise taxes and the airport and airway trust fund, 1970-2002

Statistics of Income Bulletin, Winter, 2003 by Eric Henry

The Airport and Airway Trust Fund instituted on July 1, 1970, has been affected by legislative changes over the years. These include terminating the Aviation Trust Fund in 1980, then recreating it in the Airport Improvement Act of 1982. Further changes were made in 1990, and excise tax transfers into the Aviation Trust Fund were terminated in 1996, but resumed under the Taxpayers Relief Act of 1997. The Aviation Investment and Reform Act for the 21st Century again revised the Fund in 2000. The events of September 11,2001, resulted in passage of the Air Transportation Safety and System Stabilization Act of 2001, under which airlines were able to postpone excise tax payments due between September 10, 2001, and January 15, 2002, until the latter of the two dates.

The net effect of these changes was to increase receipts from aviation-related excise taxes from $564 million in FY 1971 to $9,090 million in FY 2002, with a peak of $10,395 million in FY 1999. The FY 2002 receipts represented 13.1 percent of all excise taxes as compared to 3.3 percent for FY 1971. The Airport and Airway Trust Fund excise taxes were a reliable source of revenue for the Nation's aviation systems during the latter part of the 20th century. Receipts from these taxes continue to be the major source of revenue for the Federal Aviation Administration (FAA).