WSDOT Letter to FAA: Tax Collections, Offsets, and State Efforts to Resolve Airport Revenue Compliance Issue

In an April 2026 letter to the FAA, the Washington State Department of Transportation provided detailed tax collection data and proposed spending offsets in response to federal questions about how Washington taxes aviation fuel. The letter covers Aircraft Fuel Tax revenues dating to 1983, local sales and use taxes on aircraft fuel tracked since 2023, and hazardous substance taxes, while explaining which taxes are grandfathered under federal rules. The state also outlined its methodology for calculating aviation-related budget offsets and committed to providing further updates within 60 days.

Notes

Washington State Department of Transportation (WSDOT) letter dated April 24, 2026, to Michael W. Helvey, Director of the FAA Office of Airport Compliance and Management Analysis, responding to the FAA’s October 21, 2025, inquiry. The letter addresses three items: (1) Aircraft Fuel Tax collections under Chapter 82.42 RCW deposited in the Aeronautics Account, including grandfathered $0.05/gallon rate; state and local sales and use taxes under RCW chapters 82.08 and 82.12 with data beginning July 2023; Hazardous Substance Tax (HST) under RCW 82.21, Petroleum Products Tax (PPT) under RCW 82.23A, and Oil Spill Tax (OSP) under RCW 82.23B; (2) proposed offsets via Excel file ‘Agency Budget Approps for Aviation 2017-2026,’ addressing reappropriations vs. appropriations and biennial vs. supplemental budget treatment, Aeronautics Account appropriations, and Motor Vehicle Fuel Tax; (3) a commitment to provide further updates by June 23, 2026. References federal grant assurance compliance and aviation revenue diversion concerns.

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