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Airlines, Facing Coronavirus Fallout, Ask For Tax Relief

By Joshua Rosenberg · 2020-03-16 18:16:57 -0400

A trade group representing some of the country's largest airlines asked the federal government Monday to provide tax relief to the industry as it contends with the new coronavirus' economic fallout. 

Airlines for America urged the government to rebate excise taxes that airlines will have paid to the Airport and Airway Trust Fund starting from the beginning of 2020 until the end of March and to temporarily exempt airlines from all federal excise taxes. 

"This is a today problem, not a tomorrow problem,'' Airlines for America's president and CEO, Nicholas Calio, said in a statement. "It requires urgent action." 

Airlines are currently subject to a variety of excise taxes, including a 7.5% tax for transporting passengers, a tax of 4.4 cents per gallon of jet fuel and a 6.25% tax for cargo.

The economic situation airlines currently face is "simply not sustainable," the group said, which is exacerbated by "the fact that the crisis does not appear to have an end in sight."

In addition to providing tax relief, the federal government should also provide grants and loans to the industry totaling more than $50 billion, the group said in its statement. 

To shore up liquidity crises, the government should provide $25 billion worth of loans to passenger airlines and $4 billion to cargo-oriented airlines, the group said. 

President Donald Trump's National Economic Council director, Larry Kudlow, told Fox Business on Monday that the government may act to financially support the airline industry. 

Providing a bailout to the airline industry is "absolutely a key topic of discussion here," he said. "It'll be up to Congress as well."

Monday's letter comes after the U.S. House of Representatives passed emergency legislation Saturday morning to address COVID-19, including a new tax credit for employers who provide emergency paid sick leave for their workers. 

The U.S. Senate may soon consider a version of that legislation and lawmakers are reportedly working on additional pieces of legislation that would address the virus and its economic consequences.

--Editing by Neil Cohen.

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