The Facts: Delta Gets Smacked by Georgia for Its NRA Rejection

Delta was going to get a tax break on jet fuel, but then it decided to fight the NRA in an election year in Georgia.

Here are the basic facts.

Up until a couple of years ago, Delta had a special perk in the Georgia tax code. It was exempt from paying sales tax on aviation fuel. Other airlines had to pay the tax. Delta did not. When the state reassessed how it calculates and collects transportation taxes during the recession, Delta lost its perk.

Delta has lobbied for it ever since. To sweeten the deal, Delta has wanted to apply it to other airlines as well. It would benefit Southwest, American, and United. But it was always designed as a Delta tax exemption. Georgia is the only state with a major aviation hub that does not give a tax break on jet fuel at that hub.

Last week, the Georgia House of Representatives passed tax legislation that would have restored Delta's tax break and applied it to all airlines at Two Dead Mayors International Airport. Clayton County, in which the airport resides, objected because it would be seriously impacted by the exemption, but the legislature did not care as Clayton County is a Democrat run county. The legislature justified restoring the tax exemption because it believed Delta would then expand the number of international cities it flies to from Atlanta, which would then make Atlanta even more attractive to Fortune 500 companies.

On Friday, the legislation moved to the Senate where it got held up on a procedural issue raised by State Senator Michael Williams, a candidate for governor. Then, over the weekend, Delta announced it would stop doing business with the NRA. Thereafter, the Speaker of the Georgia House and others who had already voted for the tax break came out in opposition to Delta's proposed tax break. Today, Lt. Governor Casey Cagle, also a candidate for governor, explicitly said he was killing the Delta tax exemption because of Delta's treatment of the NRA.

Contrary to some press reports, Delta is not losing a tax exemption. Delta is just not getting a tax exemption back.

Those are the facts. Now here is some color commentary on the situation.

First, Delta has been a notorious lobbyist in the legislature against second amendment rights and against socially conservative legislation. Delta drove the opposition to Georgia adopting the federal Religious Freedom Restoration Act and also opposed expanded concealed carry legislation in Georgia. Delta has also opposed giving faith based adoption agencies any protections. It is extremely rare for Delta to get rejected by the legislature. But then the Lt. Governor and a State Senator are running for governor and Delta handed them an issue they could use.

Second, Georgia is notorious about having bad business policies, but then carving out deals to attract businesses to the state. Georgia is also notorious for supporting cushy deals for Fortune 500 companies at the expense of Georgia's small and medium sized businesses. Usually Delta benefits and this time it does not.

This actually puts conservatives in an odd places because many of them opposed giving Delta the sales tax exemption as an example of crony capitalism. But they are also opposed to the state punishing private businesses for their views. Delta has every right to do business with whoever it wants and to refrain from doing business with whoever it wants. It should not get punished by the state for who it does and does not do business with.

At the same time, the tax exemption was crony capitalism at its finest and kept the state from having to deal with how it supports and does not support businesses. The exemption should never have happened. The ends do not justify the means. A citizen, whether an individual or corporation, should not be punished by the state for its viewpoint. Ultimately, it is worth noting that Delta would have had its tax exemption by a crony capitalist oriented legislature had it just waited till Wednesday of this week to sever ties with the NRA, or had this fight happened outside a gubernatorial election year.

If nothing else, this whole business exposes just how corrupting crony capitalism is and should show businesses that if they use the government benefit themselves and hurt their enemies, that government can turn on them too. We should all support level playing fields and Delta has never done that. Today is one of those rare occasions where it found itself off the high ground.

Contrary to some press reports, there is no danger that Delta packs up and leaves Georgia over this. It is too heavily invested in Two Dead Mayors Airport and still gets enormous benefits from the state. But it won't be happy.

Comments
No. 1-11
gavinwca
gavinwca

Thank you Georgia!

meh130
meh130

So why is there a sales tax on fuel? Shouldn't fuel be taxed via an excise tax per gallon?

TexasGrandma
TexasGrandma

Since small businesses are the backbone of the U.S. economy, I have wondered why governmental entities continue to burden small companies and tax payers with burdens so they can give opportunity to big business to establish a kind of corporate socialism...... If there is only one chain of food stores in your area, the price of food will be high... We need a simplified tax code, citizens holding elected officials to policies that benefit all in their communities and fewer inane regulations!

Popdaddy57
Popdaddy57

I don't really want Amazon here, but it will be interesting to see what Amazon does if Cagle and the legislature slap Delta's hand.

jrbfromga
jrbfromga

Amen. If "we" win, "we" all lose. Will have to consider moving because Georgia will be purple and Atlanta will be uninhabitable for a "real" Georgian.

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