Bill Seeks to Reduce Taxes on Inter-island Flights

View from above on approach to Kahului Airport. Photo by Wendy Osher.

By Wendy Osher

A House committee is scheduled to hear a bill tomorrow that seeks to exempt inter-island flights from general excise and use taxes for sales of fuel from a foreign-trade zone.

Upon introducing the item Rep. Angus McKelvey of West Maui said, “This bill impacts everyone because as an island state we are extremely dependent on inter-island air travel, especially in ensuring that the smaller rural areas in Hawaii are well-served and have access to the other areas of the state for business, as well as staying connected with loved ones.”

“In these times of rising costs, we need to look at what we can do to benefit everyone and I believe HB1128 is a step in the right direction,” said Rep. McKelvey.

The item is scheduled to be heard at 8:30 a.m. on Wednesday, Feb. 6, 2013, before the Committee on Veterans, Military, & International Affairs, & Culture and the Arts.

Sales of fuel sold from a foreign-trade zone for use by airlines traveling out of the state are currently exempt from general excise and use taxes. However, inter-island flights are not exempt.

Supporters of the measure say that extending an exemption on general excise and use taxes for sales of fuel from a foreign-trade zone for inter-island flights would level the playing field.

Supporters say the legislation would also help reduce the costs carried on to consumers and bring the islands closer together.