|Commercial jetliner being fueled|
These figures are noteworthy for several reasons.
Fuel expenses range from 20% to 40% of any given airline’s operating cost; therefore, taxes on that fuel are a significant driver of ticket prices.
In addition, the three states with the highest taxes are home to several of the nation’s busiest airports, including Atlanta’s Hartsfield Airport (ATL), Los Angeles International (LAX), San Francisco International (SFO) and O’Hare International (ORD) in Chicago. Taxes in New York and Maryland, the locations of John F. Kennedy International (JFK) and Baltimore-Washington International (BWI), respectively, are among the nation’s lowest.
Given their razor-thin profit margins, it would not be inconceivable that airlines consider state taxes when deciding where to expand operations and develop new hubs. Perhaps that is one factor driving Delta Air Lines’ (NYSE:DAL) expansion of service to and from Seattle-Tacoma International (SEA), where the state tax on jet fuel is $0.04 per gallon, about one-seventh the rate of neighboring California. (See previous post).
The full report from The Tax Foundation is available here and makes interesting reading.
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Photos by Carl Dombek
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