State Representative Rick Perales (R-Beavercreek) has introduced legislation that would reform the existing system of aviation fuel taxation by creating a dedicated revenue stream to be used for airport infrastructure and economic development in the aerospace and aviation industry.

"Aviation is a critical aspect of Ohio’s economy,” Perales said. “Economic development doesn't work without effective and vibrant air travel. Our airports are currently in dire need of maintenance and improvements. This bill will not result in a tax increase, but will simply relocate revenue received from aviation fuel from the General Revenue Fund to the State Sales Tax Fund. These funds will be available for re-investment and appropriation for aviation purposes. This bill is vital to ensure our airports are up-to-date, safe and secure."

Under state law, fuel used for aviation purposes is the only form of transportation fuel sale that is subject to the state sales tax, as opposed to the motor vehicle tax. The sale of aviation-related fuel contributes roughly $14-$16 million per year to the state’s General Revenue Fund (GRF).

Rep. Perales’ proposal would redirect sales tax proceeds on aviation fuel from the GRF to the motor vehicle tax fund, which could then be fully invested in things like airport improvements, aerospace technologies and job-creation efforts.

In addition, the new investment fund could be used to help support local projects when applying for Federal Aviation Association (FAA) grants. Those grants often require a 10-percent match at the local level. For instance, devoting $10 million of the new fund for local-match purposes would yield $100 million in federal funds.

The bill has already received the support of the Ohio Aviation Association, the Aircraft Owners and Pilots Association, and the Ohio Contractors Association.

The legislation has been referred to the House Ways & Means Committee.

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