Georgia has asked vendors to stop collecting local sales tax on jet fuel, just months after the lieutenant governor effectively killed a broader sales tax exemption to punish Delta Air Lines for eliminating discount fares for National Rifle Association members.
The Georgia Department of Revenue on June 1 asked vendors to stop collecting local sales tax on retail sales of jet fuel beginning July 1. It said the move was needed to ensure Georgia complies with federal law and Federal Aviation Administration policies on jet fuel sales.
State Revenue Commissioner Lynne Riley said in a statement the change would help avoid the possibility of sanctions and "preserve the tens of millions of dollars of annual federal airport assistance" the state receives.
The revenue department's move came in response to a 2014 revision to FAA policy that limits the taxes that can be collected on aviation fuel.
Gov. Nathan Deal soon after announced the state would make over $28 million available to communities with airports that stand to lose tax revenue, through a grant from the Department of Community Affairs.
"In light of DOR's announcement, which brings Georgia into compliance with the federal government, I've allocated $28 million to assist the 48 local governments affected by suspension of the local sales tax," Deal said in a statement.
He said the grants were based on the monthly average of each community's tax and the remaining time the tax is in effect, and will be disbursed by DCA by the end of this fiscal year.
Clayton County, home to Hartsfield-Jackson Atlanta International Airport, will be awarded nearly all of the grant money, getting close to $27 million.
Clayton had previously filed a federal lawsuit claiming that loss of the tax revenue would be a burden to the county and its school district, but the lawsuit was dismissed by the 11th U.S. Circuit Court of Appeals in April.
Chatham County, home to Savannah-Hilton Head Airport, will get the second largest grant at just over $480,000.
Deal had earlier proposed the implementation of state and local sales tax exemptions on jet fuel, which would have saved Delta Air Lines, one of the state's largest employers, millions of dollars a year.
But in February, Lt. Gov. Casey Cagle and his Republican colleagues in the state Senate killed that tax break to punish Delta for ending a discount program for NRA members.
The uproar, which drew national media attention, began when Delta stopped offering fare discounts to NRA members in the wake of the February school massacre in Parkland, Florida.
Cagle, now vying to become governor, is locked in a contentious runoff for the GOP nomination with Secretary of State Brian Kemp that will be decided July 24.
