Posted on: Saturday, May 17, 2003

Air tour operations get break in tax-cut bill

By Curtis Lum
Advertiser Staff Writer

Helicopter and airplane tour operators will be exempt from the air transportation tax under a provision in the $350 billion tax cut bill approved by Thursday by the U.S. Senate.

The exemption was proposed by Sen. Dan Inouye, D-Hawai'i, and would amend the Internal Revenue Code so helicopters and certain categories of fixed-wing aircraft that conduct sightseeing flights would be exempt from the tax. The provision would cover air tour operators nationwide and save the industry millions of dollars, a spokesman for Inouye said.

The fate of the exemption is unclear, however, as the Senate's tax bill must be reconciled with the House version. But Inouye spokesman Mike Yuen said the senator is hopeful that the measure will survive.

"This is still something that's not etched in stone, but it's something that the helicopter operators in Hawai'i want," Yuen said.

Inouye said Congress intended that the air passenger transportation excise tax be levied on scheduled commercial airlines. He said it was not the intent of the law to impose it on air tour operators.

Inouye said tour operators will still be subject to the aviation fuel tax.