vincentharris

Unfortunately that is the logic of governments in the tri-state area....

Kacee

They should just go ahead and call it "protection."

halls120

It is New Jersey, after all.

halls120

duplicate

3Cforme

No. The state (or other legislative and taxing entity) can't say 'This tax only applies to United Airlines,' but a passenger count, or revenue, or whatever metric that just happens to apply only to United at this time is fine. It's a technique that has been used at the federal and state levels in many cases for decades.

United looks foolish even to make this bluff.

vincentharris

They could just pick up and move to PHL and buy up AA's gates there. Then they can laugh across the river back at the people in Trenton who imposed the tax (PHL is possibly the only airport WORSE than EWR)

EWR should run a new marketing campaign...

"EWR, hey at least we are not PHL"

This is a terrible bluff. Its like trying to bluff with a pair of 2's and the dealer has 4 aces

goodeats21

Little bit confused.

The article indicates that airlines currently pay tax on fuel purchases only used for takeoffs and landings in NJ airports (which must be an interesting calculation), but it sounds like now the tax will apply to all the fuel purchased.
So is this really a tax rate hike, or just applying the same existing tax to the entire fuel purchase?

Seems almost like they got some type of exemption for the fuel purchased that is not "burned' in NJ, but that is now going away?

Bluehen1

It's not an exemption. It's the way that NJ taxes fuel for the airlines. United can go ahead and move to other states, but they're gonna get taxed at full rates as NJ is trying to do now. Yes, it is weird that this is only applying to UA (guess the state doesn't feel that everyone else is a big enough fish to go after) but by moving to another state they're not going to get away from being taxed on the full amount of fuel they use.

fumje

I read it as applying the same existing tax to the entire fuel purchase with no change in rate. So yes, to me it also sounds like there is effectively an exemption that may be revoked.

Do other states tax the entire fuel purchase?

I poked around and came across another article that seems to imply not, although it does so in language that makes me wonder how NJ could impose a tax.

Bluehen1

Found this from 2014...

Combined Effective Commercial Jet Fuel Tax Rates and Fees by State

fumje

Says,
—which (assuming still current) helps put into context the consideration, implying that perhaps NJ does not any longer feel the need to compete with NY for United's capacity.

SFO777

As with most government money grabs, there is a risk that NJ could wind up losing tax revenue by raising taxes on UA, even if UA stays as it is.

Since planes don't refuel before each flight, UA could implement a "Don't refuel at EWR" policy... manage fuel purchases on short-haul flights and refuel/top up only at cheaper tax out of state airports (assuming other taxes are lower than NJ) instead of at EWR. Obviously, that wouldn't work on long hauls but a 20% decrease in EWR fuel purchases would offset revenue gained from the tax increase. Presumably, fuel suppliers would lay off NJ staff if demand is cut further cutting state tax revenues.

Here's an idea NJ and every other state and local government, cut your crazy state employee pensions.

windhund

Perhaps UA is threatening to move administrative offices and staff out of Newark, not flights? I'm not sure how many jobs UA has in Newark that *have* to be in Newark.

mh3265a

Agree. They don't have a good position or hand to deal. That said, when the city of Houston opened up Hobby to int'l flights they did punish Houston by cutting some international flights. I could see UA cutting back service from EWR and moving to IAD but they won't give up EWR entirely. Maybe they would look to shifting more ops to JFK?

That said the bill is BS. If they want to levy more tax on fuel then do it evenly across the board.

chrisl137

I think I had to walk farther to go from customs back to gate 83 yesterday than to walk from LAX T7 to Lot C when the buses are slow. There are a number of especially nice bottlenecks.

I managed to avoid EWR for years and have had to connect there a few times recently. EWR is my least favorite airport, and I start half my flying by getting to LAX...