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State Considers Taxing Jet Fuel and Bottled Water

Under current Texas law, jet fuel is exempt from the motor fuel tax.
Photo by I-Hwa Cheng for KUT News.
Under current Texas law, jet fuel is exempt from the motor fuel tax.

Texas raked in 9.4 percent more in sales tax this year than it did last year, but state officials don't expect that growth to continue in 2012. So they're looking at other ways to find more money.

One way is to tax things that are currently exempt from taxation. At a public hearing at the Capitol today, two items attracted the most attention: bottled water and jet fuel.

Under the current Texas law, bottled water is exempt from sales tax. A bill proposed by the House Committee last May had an amendment to change that, but the legislation was never adopted.

Another point of interest in the sales tax code concerns jet fuel.Fuel used for aviation is exempted from the motor fuel tax. So is gas used in lawn mowers and boats, but people have to apply to get that tax refunded.

The jet fuel exemption made news earlier this year after Representative Eddie Rodriguez claimed Texas is the only state to offer such an exemption. Both Representative Rodriguez, and Fischer today, noted that taxing jet fuel would earn the state $4.5 million in revenue, according tothis report from Comptroller Susan Combs.

Lawmakers on the House Ways and Means Committee asked the Comptroller's office to report back with more specifics on the numbers and they'll hold another hearing, probably within the next few weeks.