Aviation Fuel Tax: Federal Rates, Refunds, and SAF Credit

The federal aviation fuel tax is 4.4 cents per gallon on kerosene used in commercial aviation, 21.9 cents per gallon on kerosene used in noncommercial aviation, and 19.4 cents per gallon on aviation gasoline as of 2026. Each rate already includes a 0.1-cent surcharge for the Leaking Underground Storage Tank Trust Fund, so you will sometimes see the base rates quoted as 4.3, 21.8, and 19.3 cents depending on the source. Several categories of use are either exempt outright or eligible for a refund of tax paid at the pump.

Federal Rates by Fuel Type

Aviation gasoline powers piston-engine aircraft and is taxed at a flat 19.4 cents per gallon regardless of whether the flight is personal, business, or commercial.¹

Kerosene-type jet fuel is taxed at one of two rates depending on how the aircraft is being used:

Commercial aviation: 4.4 cents per gallon. The rate is low because passengers on scheduled and charter flights also pay a 7.5% ticket tax and a per-segment fee ($5.30 domestic in 2026), which together bring far more into the trust fund than the fuel tax alone.²³
Noncommercial aviation: 21.9 cents per gallon. This covers corporate flights, personal use of turbine aircraft, and air taxi work that does not qualify as commercial aviation.²

Fuel loaded directly into an aircraft at a fuel terminal is taxed under IRC Section 4081; fuel sold outside a terminal setting falls under Section 4041.⁴ The per-gallon amount an operator pays is the same either way.

Where the Money Goes and How Long the Tax Lasts

Almost every dollar of federal aviation fuel tax feeds the Airport and Airway Trust Fund, which pays for FAA operations, airport grants, and air traffic control modernization.⁵ The trust fund also collects the passenger ticket and segment taxes, cargo waybill taxes, and the fractional ownership surtax.⁶

The current taxing authority runs through September 30, 2028, under the FAA Reauthorization Act of 2024.⁷ Unless Congress extends it again, the rates you see today will need to be reauthorized by that date.

Fractional Ownership Surtax

Aircraft in a fractional ownership program pay an additional 14.1 cents per gallon on top of the standard fuel tax.⁸ The surtax applies to flights carrying a fractional owner and to empty repositioning flights for a fractional owner’s trip. It does not apply to fuel burned on maintenance flights, crew training, or demonstration flights. This surtax also expires September 30, 2028.

Who Pays at the Pump

At most general aviation airports, the fixed-base operator or fuel vendor collects the tax at the point of sale. The pump price already contains the federal and any state tax, and the vendor remits it through Form 720.

Airlines work differently. A carrier buying kerosene for commercial aviation is itself liable for the tax and pays the government directly.⁴ Either way, the ultimate legal liability sits with the party using the fuel. If tax was not paid at the pump, the aircraft operator owes it.

Exemptions and Nontaxable Uses

IRS Publication 510 recognizes the following categories as nontaxable uses of aviation fuel, meaning the tax either does not apply or is refundable:⁹

Military aircraft.
Aircraft used exclusively by a state, a political subdivision, the District of Columbia, or the American Red Cross. Indian tribal governments are treated as states when the fuel supports an essential governmental function.
Civil aircraft operating in foreign trade or between the United States and its territories. Foreign-registered aircraft qualify only if the aircraft’s home country grants reciprocal treatment to U.S.-registered aircraft. This exemption also removes the LUST surcharge.
Air ambulances, including both helicopter and fixed-wing emergency medical transport.
Fuel used on a farm for farming purposes.
Nonprofit educational organizations.
Qualified blood collector organizations.
Aircraft owned by a qualifying aircraft museum.
Fuel used in an aircraft for something other than powering the engines, such as a ground power unit.

Two things this list does not cover: the small aircraft ticket-tax exemption (non-turbojet, 6,000 pounds or less, not on a fixed schedule) removes the passenger tax, not the fuel tax, so the operator still owes the standard per-gallon rate. And a state or local government owning an aircraft does not by itself remove state fuel tax, which is a separate question.

Getting the Tax Back: Form 8849 and Form 4136

If you buy taxed fuel and then use it for one of the nontaxable purposes above, there are two ways to recover the money.

Quarterly Refunds on Form 8849

Schedule 1 of Form 8849 handles nontaxable use of fuels, including avgas and kerosene.¹⁰ A claim must total at least $750, which you can reach either in a single quarter or by rolling forward unclaimed amounts from earlier quarters in the same tax year.¹¹ File during the first quarter after the last quarter in the claim. Only one claim per quarter is allowed. The general limit for filing is three years from the return the claim relates to, or two years from when the tax was paid, whichever is later.¹²

Annual Credit on Form 4136

Form 4136, filed with your income tax return, lets you claim a credit for the whole tax year at once. Line 2 covers aviation gasoline; Line 5 covers kerosene used in aviation, split between commercial and noncommercial.¹³ Only the ultimate purchaser can file, not a reseller. For kerosene used in commercial aviation, either the purchaser or a registered ultimate vendor can claim it, but not both on the same gallons.

Whichever route you take, keep the paperwork tight: date and location of each purchase, gallons allocated to each nontaxable purpose, and proof the tax was actually paid. Weak recordkeeping is the most common reason refund claims stall.

Dyed Fuel Will Cost You

Dyed diesel and dyed kerosene are sold tax-free for off-road uses like heating and farm equipment. Putting dyed fuel in an aircraft triggers a penalty of the greater of $1,000 or $10 per gallon on the first violation.¹⁴ The $1,000 floor multiplies with each repeat: a third offense carries a minimum of $3,000 or $10 per gallon, whichever is higher.¹⁵ Every officer, employee, or agent of a business who knowingly took part is jointly and individually liable, and the IRS does not accept a reasonable-cause defense on this one.

State Aviation Fuel Taxes

Federal tax is not the whole bill. State excise rates on jet fuel range from zero to roughly 24 cents per gallon, though most states sit between 1 and 5 cents. Avgas rates vary similarly, and some states layer a percentage-based sales or use tax on top of the excise tax.

Federal law limits how those state and local revenues can be spent. Under 49 USC Section 47107, any airport that has accepted federal grant money must direct local aviation fuel tax proceeds to airport capital or operating costs.¹⁶ State revenues can fund a state aviation program but cannot be swept into a general fund.¹⁷ Taxes in effect before December 30, 1987 are grandfathered out of that restriction.

Sustainable Aviation Fuel Producer Credit

Producers of sustainable aviation fuel can claim the Section 45Z clean fuel production credit for fuel produced in tax years beginning after December 31, 2024 and before January 1, 2028.¹⁸ This replaces the Section 40B SAF credit that expired at the end of 2024.

The credit tops out at 20 cents per gallon for facilities that do not meet prevailing wage and apprenticeship requirements, and up to $1.00 per gallon for facilities that do.¹⁹ The actual amount is scaled by an emissions factor comparing the fuel’s lifecycle greenhouse gas emissions to a petroleum baseline. Qualifying SAF must meet ASTM D7566 or the Fischer-Tropsch provisions of ASTM D1655, and cannot be derived from palm fatty acid distillates or petroleum.¹⁸

Producers must register under Section 4101 and get third-party certification of the emissions profile. If you previously held Activity Letter SA on Form 637 for the old Section 40B credit, you now need Activity Letter CA for Section 45Z.²⁰ The fuel must be produced in the United States from feedstock grown or produced in the United States, Mexico, or Canada. This is a producer credit, not a rebate for operators buying SAF at the airport.

1
Internal Revenue Service. Form 720 (Rev. March 2026)
2
Office of the Law Revision Counsel. 26 USC 4041 – Imposition of Tax
3
Internal Revenue Service. Instructions for Form 720 (Rev. March 2026)
4
Office of the Law Revision Counsel. 26 USC 4081 – Imposition of Tax on Gasoline, Diesel Fuel, and Kerosene
5
Federal Aviation Administration. Airport and Airway Trust Fund (AATF)
6
Office of the Law Revision Counsel. 26 USC 9502 – Airport and Airway Trust Fund
7
Congress.gov. HR 3935 – 118th Congress (2023-2024) FAA Reauthorization Act of 2024
8
Office of the Law Revision Counsel. 26 USC 4043 – Surtax on Fuel Used in Aircraft Part of a Fractional Ownership Program
9
Internal Revenue Service. Publication 510 (Rev. December 2025) – Excise Taxes
10
Internal Revenue Service. About Form 8849, Claim for Refund of Excise Taxes
11
Internal Revenue Service. Schedule 1 (Form 8849) – Nontaxable Use of Fuels
12
Internal Revenue Service. Instructions for Schedule 6 (Form 8849)
13
Internal Revenue Service. 2025 Instructions for Form 4136
14
Office of the Law Revision Counsel. 26 USC 6715 – Dyed Fuel Sold for Use or Used in Taxable Use
15
Internal Revenue Service. Excise Tax and Associated Penalties
16
Office of the Law Revision Counsel. 49 USC 47107 – Project Grant Application Approval Conditioned on Assurances About Airport Operations
17
Federal Aviation Administration. FAA Order 5190.6C – Airport Compliance Manual Chapter 15
18
Office of the Law Revision Counsel. 26 USC 45Z – Clean Fuel Production Credit
19
Federal Register. Section 45Z Clean Fuel Production Credit
20
Internal Revenue Service. Form 637 – Application for Registration (For Certain Excise Tax Activities)