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The Honolulu Advertiser
Updated at 2:55 p.m., Monday, March 31, 2008

State Senate passes tax relief for interisland airlines

Advertiser Staff

The state Senate today passed a bill that would exempt Aloha Airlines and other interisland carriers from paying general excise and use taxes on fuel sold in the foreign-trade zone.

The bill, which now goes back to the state House, was not specifically related to Aloha Airlines' recent financial trouble but is an attempt to help interisland carriers.

Fuel sold from a foreign-trade zone to airlines traveling out of Hawai'i are already exempt from general excise and use taxes. Lawmakers said that exempting the interisland carriers would level the playing field.

"It's time that we try to assist all of our interisland carriers because they are in a situation where the fuel taxes are making up an enormous part of their losses in this market and they are very vital to our state," said state Sen. Rosalyn Baker, D-5th (W. Maui, S. Maui).

The vote was 21 to 2.