Jet Fuel Tax Break Ends On Tuesday

Paul Bass File Photo

No more tax-free fuel, starting July 1.

Connecticut will reinstate its jet fuel tax on July 1, ending a two-year exemption that had temporarily suspended the levy for commercial airlines — including Avelo — that operate in the state. 

That tax break was first enacted by the General Assembly in 2023. It allowed airline carriers to avoid paying what officials estimate amounted to roughly $7 million per year in fuel taxes, in total for all airlines. With the sunset of that policy at the start of the new fiscal year on July 1, all commercial carriers will once again be subject to the tax.

The timing of the tax’s return comes as scrutiny mounts around the role some airlines, like Avelo, play in federal immigration enforcement. In neighboring New York, State Sen. Patricia Fahy recently introduced legislation that would revoke jet fuel tax exemptions for carriers that participate in deportation flights. The proposal, part of Fahy’s broader SAFE AIR Act, seeks to leverage state contracts and tax benefits to hold airlines accountable for their involvement in immigration removals.

Meanwhile, in Connecticut, the state legislature suspended the jet fuel tax for a two-year period in 2023, but did not renew that suspension this year, according to New Haven State Sen. and President Pro Tem Martin Looney. So it goes back into effect on July 1,” he told the Independent on Friday. The tax break was for all carriers,” not just Avelo.

The policy change was included in a comprehensive 2023 budget bill introduced by the state legislature’s Democratic leadership, and signed into law by Gov. Ned Lamont. 

According to a summary provided by the Office of Legislative Research, Connecticut stopped charging the 8.1 percent petroleum tax on aviation fuel starting July 1, 2023, creating a pause on taxing aviation fuel during fiscal years 2024 and 2025. A new aviation fuel excise tax of 15 cents per gallon will begin on July 1, 2025. 

This tax will apply either when aviation fuel is first sold in the state or when it’s brought in and used by a company — though each gallon will only be taxed once. The rate will be adjusted every four years based on inflation, and all revenue will go into a state fund used by the Connecticut Airport Authority for airport and aviation-related projects.

The renewed tax is expected to generate approximately $7 million annually for the state, a portion of which has already been earmarked for local mitigation efforts. According to Looney, $1 million of that revenue will be directed specifically toward noise and sound mitigation initiatives in areas impacted by air traffic. An additional $10 million — approved separately through the Bonding Act — has been allocated for broader environmental and infrastructure improvements, including traffic and environmental concerns related to airport activity.

Asked for a comment for this article, Avelo spokesperson Courtney Goff wrote, We’re monitoring the tax proposal. Until a decision is made, we continue to focus on our operation and delivering industry-leading reliability in the State of Connecticut and across the country.” (Click here to read a CT Mirror article about Avelo’s role in pushing for the tax break back in 2023.)

New Haven has become a focal point for the boycott movement against Avelo Airlines, which operates 30 direct passenger routes out of Tweed New Haven Airport while simultaneously running deportation flights from a separate airport in Arizona. The budget carrier, under financial pressure, has defended its partnership with the Department of Homeland Security as a necessary move amid growing competition in its New Haven travel market. Still, activists and officials across Connecticut and beyond continue to condemn the airline’s involvement in migrant removals.

Looney said that initially, the state had considered using jet fuel tax revenues more broadly. However, federal regulations limit the use of aviation-related tax dollars, particularly when tied to airport infrastructure or flight activity. Those restrictions prompted lawmakers to supplement the budget with bonding measures to support a wider range of community mitigation projects.

Asked about the financial impact of the renewed tax, Looney said the state does not track individual airline contributions but confirmed that Avelo — like all carriers operating in Connecticut — will be required to resume payments starting July 1. 

Asked whether Connecticut had considered legislation similar to Fahy’s proposal in New York, Looney noted that any future suspension or exemption of the jet fuel tax could hypothetically exclude specific airlines based on state priorities or values. I would certainly support an exemption from that suspension for any airline that violated those values,” he added.

For now, Connecticut’s reinstated tax applies to all carriers equally. But as national debates around deportation and climate policy intersect with local infrastructure funding, jet fuel exemptions — and who receives them — may remain a live policy issue.

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