Tinicum Township Privilege Fee Proceeding

Order 2008-3-18
OST-2007-29341 - Petition for Declaratory Order Regarding Tinicum Township Ordinance No. 2007-809

Issued March 19, 2008 | Served March 24, 2008

Declaratory Order - Bookmarked

We have carefully considered the claims by the Township that the Anti-Head Tax Act authorizes it to impose taxes or fees on airlines landing at the Airport’s runways within its jurisdiction.

We find that the Township’s privilege fee is prohibited under the provisions of the Anti-Head Tax Act. The AHTA prohibits a state or political subdivision from imposing a charge on an individual traveling in air commerce, on the transportation of such an individual, on the sale of air transportation, or on the gross receipts from that air commerce or transportation. The privilege fee is a prohibited charge since it is based on the maximum landed weight of the aircraft, which in turn relates to the number of seats on the airplane. The privilege fee, accordingly, amounts to a prohibited landing fee because it imposes a charge indirectly on an individual traveling in air commerce, or a charge on the transportation of an individual traveling in air commerce, in connection with the landing of aircraft.

We further find that the AHTA prohibits the Township from imposing the landing fee, because only a state or political subdivision that owns or operates an airport may impose on aircraft operators a (reasonable) landing fee for the use of its airport. We also find that the privilege fee is not authorized by subsection (c) of § 40116, pertaining to flight takeoff or landing requirements for state or political subdivision taxation on commercial aircraft.

Finally, we find that the privilege fee is not within the permissible category of taxes that may be imposed by a state or political subdivision, including net income taxes, property taxes, franchise taxes, and sales or use taxes on the sale of goods and services.

In reaching this conclusion, we do not find that the privilege fee, as imposed on cargo aircraft, is a prohibited charge under the AHTA because it is not imposed on an individual traveling in air commerce or on the transportation of such an individual. 3 Additionally, the privilege fee does not constitute a prohibited charge on the sale of air transportation, under the AHTA, because it is not imposed in connection with the sale of a ticket or waybill. We nevertheless find the privilege fee unlawful as applied to cargo aircraft because the fee constitutes an impermissible landing fee and otherwise is not authorized by the aviation statutes.

Consequently, we may not allow the Township to impose what effectively amounts to a landing fee surcharge on users of PHL, because the rights that those users otherwise may invoke under § 47129 to contest the reasonableness of the fee would be foreclosed.

By: Michael Reynolds