Georgia Gov. Nathan Deal has suspended collection of the state’s sales tax on jet fuel, welcome news for airlines especially in the wake of a political firestorm the issue ignited earlier this year.
Mr. Deal had sought to roll back the tax as part of a broader bill in March, but that effort was quashed when Lt. Gov. Casey Cagle took Delta Air Lines Inc. to task for removing a discount for National Rifle Association members traveling to their annual convention.
Some conservatives saw Delta’s move as hostile to Second Amendment supporters. Delta said it was trying to remain neutral in the sensitive national gun-control debate that emerged after school shootings in Parkland, Fla.
Mr. Cagle, who was running for governor at the time but also headed up the State Senate as lieutenant governor, made national news by vowing on Twitter to “kill” any bill that helped Delta during its perceived assault on conservative values.
Delta occupies about 80 percent of the gate space in Atlanta and will save an estimated $40 million annually from exemption. But it will also help other carriers like Southwest Airlines and cargo airlines landing freighters here. Airlines paid a 4 percent tax on fuel purchased here.
That was the fourth highest rate in the nation among states that collect jet-fuel sales taxes and operate substantial air hubs, with Georgia trailing only California, Illinois and Michigan.
Mr. Deal has argued that making airlines more competitive would also benefit major companies in the state by giving them greater travel access and choice via nonstop routes.
Using an executive order to effectively neutralize the tax, he also pointed out the airport’s $62 billion regional economic impact and the $11 billion in foreign investment and 42,000 related jobs it helps support.
Delta praised Mr. Deal in a statement, hewing closely to his line on Georgia’s global competitiveness:
“Delta wants to thank Gov. Deal for his steps to ensure that the state of Georgia will remain competitive in the global economy.
With 33,000 employees in Georgia, we are honored to call this our home state, and proud of the $58 billion in economic impact that Hartsfield-Jackson Atlanta International Airport creates statewide every year. The savings will allow us to invest additional flights into Georgia in the years to come. We look forward to continued growth of our service in Georgia and the job creation that will accompany it.”
The governor’s chief of staff recently returned from a trade mission to China centered around a nonstop flight Delta launched from Atlanta July 20.
The Atlanta Journal-Constitution reported Tuesday that Georgia Secretary of State Brian Kemp, who trounced Mr. Cagle in a runoff for the GOP gubernatorial nomination, now says he supports Mr. Deal’s action after blasting the exemption on the campaign trail.