Senate May Drop Proposed Airline Tax

In a victory for major airlines, Senate tax writers are ready to drop a proposed levy on domestic legs of international flights that the industry feared would damage tourism. Senate tax negotiators’ have offered to drop their $2-billion tax increase on the domestic portion of international flights and accept the House proposal to levy a $31 tax on international flights. The proposal was included in the latest offer by Senate tax writers as the two sides try to resolve conflicting provisions in their respective tax bills. Both bills aim to provide $135 billion in total tax cuts, offset by roughly $50 billion in new revenues, including extension and modification of airline ticket taxes. The House and Senate bills contain major differences in airline ticket taxes, which were set to expire at the end of September. The nation’s seven major airlines have unleashed a national lobbying campaign to oppose the Senate version and back the House bill. Although the Senate offer is significant, the two sides still have plenty of work to do before the airline tax package in completed. Because many elements remain unresolved, no one could estimate how the Senate concession would affect the average air traveler.