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Facing loss of fuel-tax exemption, United says it supported $16B in NJ economic activity in 2017

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United Airlines contributed to $16 billion in economy activity in New Jersey in 2017, according to an economy impact study released by the airline Monday.

The study was released as the state Assembly is considering Assembly Bill 4392 and the Senate a similar bill that would eliminate certain aviation fuel tax exemptions to qualifying airlines to provide funding for PATH train extension to Newark Liberty International Airport and airport improvements. United is the airline that would be most affected by the proposed legislation.

“We do not have a loophole or tax break or exemption as suggested. New Jersey has structured its tax rate the same way New York State structures its tax, applying the tax to the number of gallons used in the state,” said Jill Kaplan, president of the New York/New Jersey region for United Airlines. “United pays the same jet fuel tax rate as other commercial air carriers that serve in New Jersey. We believe A-4392/S-2892 violates federal law because it proposes to divert jet fuel tax revenue to pay for projects that are not for the ‘exclusive use’ of the airport or other aviation-related purposes.

Jill Kaplan
Jill Kaplan - ()

“We are not aware of any planned projects that require funding which would meet the guidelines provided by the FAA. United is a major taxpayer in New Jersey. For example, we pay local taxes and the corporate business tax in addition to the existing jet fuel tax. Additionally, United also pays over $400 million in rents and landing fees annually at Newark Liberty.

“United has made $2 billion in unsubsidized investments at Newark Liberty International Airport since 2000, nearly $400 million over the last two years and just this past July announced two new community partnership grants totaling $1 million to support workforce redevelopment programs in Newark and Elizabeth, this is in addition a multitude of other community organizations we have supported through the years as a good corporate citizen,” Kaplan said.

The report, which was prepared by transportation consulting firm InterVistas Consulting, said United and its Star Alliance partners operated about 290,000 flights from Newark, carrying more than 30.4 million passengers in 2017. United accounted for 76 percent of Newark Liberty International Airport flights last year, according to the study.

The airline paid $470 million in federal taxes, $500 million in state and local taxes and $660 million in airport revenues, according to its study.

United employed nearly 14,000 people in Newark in 2017, paying an average wage of more than $110,000 per employee, according to the report.

Meanwhile, United customers spent a total of $1.6 billion in New Jersey, which support 23,000 jobs, mostly in the hospitality industry, the study said. 

InterVistas obtained data from United, the U.S. Bureau of Economic Analyses, U.S. Bureau of Labor Statistics, U.S. Department of Transportation and public reports from the Port Authority of New York and New Jersey in compiling the report. 

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David Hutter

David Hutter

David Hutter grew up in Darien, Conn., and covers higher education, transportation and manufacturing for NJBIZ. He can be reached at dhutter@njbiz.com.

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