US SB173

S. 173 - Fueling Alternative Transportation with a Carbon Aviation Tax Act of 2025

• Increases excise tax on private jet fuel from 21.8 cents to 35.9 cents per gallon, plus an additional $1.641 per gallon carbon surcharge, with the surcharge indexed to inflation starting in 2027

• Commercial aviation fuel remains taxed at the current rate of 4.3 cents per gallon, creating a significant tax differential between private and commercial flights

• Eliminates air transportation tax exemptions for most private aircraft uses, maintaining exemptions only for helicopters and fixed-wing aircraft used for forestry activities

• Establishes the "Funding to Support Clean Communities Trust Fund" to receive revenue from the increased private jet taxes, with at least 50% of expenditures directed to disadvantaged communities

• Trust fund revenues support air quality monitoring, public transit and passenger rail infrastructure within 20 miles of airports, and improved bus service, with effective date of January 1, 2026