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ACI-NA studying tax collection legislation

The Airports Council International-North America (ACI-NA) is studying legislation that would require airports with budgets in excess of $100M to collect a 3% withholding fee on all payments for goods and services to vendors starting in 2010.

Upon learning of the legislation early this week, the organization circulated an email memo to its member airports informing them of the situation. Attached to the memo was a letter written and signed by seven organizations to Rep. Wally Herger, R-CA, including the Council of State Governments, the Government Finance Officers Association, and the National Association of Counties opposing the legislation.
Those organizations argue that the legislation “imposes a massive unfunded mandate on state and local governments and will cause significant administrative and other financial burdens since our members will have to retool their accounts payable systems to implement the new law,” according to the letter.

ACI-NA was not a party on the letter. Organization officials say they are still studying the impact the Tax Increase Prevention and Reconciliation Act of 2005 and two bills currently circulating through Congress that would repeal the bill. Liying Gu, director of economic affairs and research with ACI-NA, says in the memo that the legislation would “place airports in the middle of the tax collection process which makes absolutely no sense.”

In an interview, Gu says she’s uncertain how many airports would be affected by the legislation and adds that it’s too early for the organization to take an official stance on it. She learned of it from the chair of ACI-NA’s finance and administration subcommittee, Christopher Poinsatte, who also is executive vice president and chief financial officer at Dallas-Fort Worth International (DFW).

“It would only apply to larger airports,” she says.
The issue, Gu says, will be an item of discussion at the finance committee’s next meeting, which will take place during the organization’s annual conference & exhibition in Kansas City later this month.

“Our president, Greg [Principato], is paying a lot of attention to this issue,” Gu says. “It’s kind of early to go into much more detail than what you see in the memo.”