Senate Bill 178 – A Change in Aviation Fuel Tax

Why?

Supports the South Dakota State Aeronautics Fund

The State Aeronautics Fund receives revenues from aircraft registration fees and aircraft fuel taxes. The fund supports airport grants, ongoing aviation services and special projects. A well-funded aeronautics program provides airports with long-term planning capabilities, ensuring they can meet safety standards, and support economic growth. Increasing the fund balance would provide more consistent financial support, reducing reliance on unpredictable federal grants and one-time legislative appropriations.

Stagnant Rates

Based on fuel sold in 2024, a $0.01 increase in AVGas Tax would equate to an approximate additional $9,000+ annually. A $0.02 increase in jet fuel tax would equate to an additional $637,000+ annually.

State	Existing Jet Fuel Tax	Existing AVGas Tax
South Dakota	$0.04	$0.06
North Dakota	$0.08	$0.08
Iowa	$0.05	$0.08
Minnesota	$0.15	$0.05
Wyoming	$0.05	$0.05

Infrastructure Needs

South Dakota’s airports have ongoing and future infrastructure needs, including runway rehabilitations, terminal expansions, and safety upgrades. Without adequate funding, these projects may be delayed or canceled. To maintain safe, efficient, and economically beneficial airports, South Dakota must take proactive steps to replenish and increase the aeronautics fund.

Sources:
South Dakota Aeronautics Commission 2024 Report to Governor Noem

2023 South Dakota Legislature Airport Funding Work Group Report