From Deseret News archives:

Airlines again ask state for tax break

Delta, Southwest reps to testify before task force

Published: Thursday, Aug. 4, 2005 9:04 a.m. MDT
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Airlines, led by Delta, succeeded four years ago in gaining significant tax concessions on fuel. The tax discussions initially made a splash as reports surfaced that Delta might pull its hub from Salt Lake City without tax cuts. The airline later backed away from those suggestions, but the Legislature still approved significant tax cuts in 2001.

Those cuts came after intense negotiations between Valentine and Salt Lake City Mayor Rocky Anderson. Under those cuts Salt Lake City's Department of Airports lost $1.25 million annually, which Anderson maintained would be palatable because it would promote "consumer-friendly competition" between the airlines.

During those 2001 discussions Delta maintained that 43 cents of every dollar of profit it earned in Utah went to taxes.

"We are seeking some relief on the amount of tax that we pay there; that's the bottom line," Delta spokeswoman Alicia Watson said then.

Holbrook said this year's strategy will be twofold: keep the tax cuts gained in 2001 and seek even more state concessions.

"We want to keep the tax cut they have and maybe get some more," she said.

Still, Southwest district manager Ronan Rogers was a bit leery, especially since Valentine once advocated giving tax breaks only to Delta, forsaking smaller carriers.

"The last time Senator Valentine held hearings on that, it wasn't very friendly toward the airlines," he said.

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Salt Lake City Department of Airports executive director Tim Campbell said his department gains $2.59 million from the state's 4-cents-a-gallon tax on jet fuel for commercial airlines. Half of that revenue is given back to the airlines. If the rest was taken away, the airport would likely have to make it up by raising other airline fees, which would all but defeat the purpose of the tax cut, he said.

Campbell noted that Utah's tax burden for airlines isn't overly high and isn't really a factor in determining how airlines expand service in Utah.

"They're not going to add or cut service here based on our reasonable taxes."


E-mail: bsnyder@desnews.com

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