(CN) – The Department of Transportation correctly overturned a Pennsylvania town’s ordinance requiring airlines to pay a tax for each flight that landed in the town, the 3rd Circuit ruled.
Tinicum Township in Delaware County, Pa., enacted the ordinance in 2007, after Philadelphia stopped paying it for runway access for the overspill flights to and from the Philadelphia International Airport.
Though Philadelphia owns the airport, some of its runways are in Tinicum. The township originally wanted to charge the city property tax, but the city settled by agreeing to make periodic payments for runway access. That arrangement expired in May 2007.
Tinicum imposed the ordinance shortly thereafter, taxing airlines for each flight that landed within its boundaries. The tax caused a stir in the airport industry, and several passenger airlines and parcel shippers urged the DOT to strike down the ordinance.
The DOT did just that, issuing an order declaring the ordinance invalid.
Tinicum appealed to the 3rd Circuit, arguing that the agency had misinterpreted federal law barring local municipalities from levying flight-related taxes.
But the federal appeals court in Philadelphia agreed with airport industry groups that Tinicum’s ordinance violated the Anti-Head Tax Act.
The Act bans local taxes on “(1) an individual traveling in air commerce; (2) the transportation of an individual traveling in air commerce; (3) the sale of air transportation; [and] (4) the gross receipts from that air commerce or transportation.”
Although its tax appeared to fall under one or more of those categories, Tinicum argued, the law makes an exception for flights that take off from or land in the taxing locale.
The 3rd Circuit remained unconvinced.
“We hold that the AHTA’s text unambiguously demonstrates that [the exemption] is not a savings clause for flight-related taxes,” Judge Chagares wrote.
The court upheld the order invalidating Tinicum’s tax.