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ALOHA AIRLINES v. DIRECTOR TAXATION HAWAII

decided*fn*: November 1, 1983.

ALOHA AIRLINES, INC
v.
DIRECTOR OF TAXATION OF HAWAII



APPEAL FROM THE SUPREME COURT OF HAWAII.

Marshall, J., delivered the opinion for a unanimous Court.

Author: Marshall

[ 464 U.S. Page 8]

 JUSTICE MARSHALL delivered the opinion of the Court.

These appeals present the question whether 49 U. S. C. § 1513(a) pre-empts a Hawaii statute that imposes a tax on the gross income of airlines operating within the State. We conclude that the Hawaii tax is pre-empted.

I

In 1970, Congress committed the Federal Government to assisting States and localities in expanding and improving the Nation's air transportation system. See Airport and Airway Development Act of 1970, Pub. L. 91-258, 84 Stat. 219. In the same session, Congress established the Airport and Airway Trust Fund to funnel federal resources to local airport expansion and improvement projects. See Airport and Airway

[ 464 U.S. Page 9]

     Revenue Act of 1970, Pub. L. 91-258, § 208, 84 Stat. 250. As originally devised, the Trust Fund received its revenues from several federal aviation taxes, including an 8% tax on domestic airline tickets, a $3 head tax on international flights out of the United States, and a 5% tax on air freight. See §§ 203, 204, 84 Stat. 238, 240 (codified, as amended, at 26 U. S. C. §§ 4261, 4271 (1976 ed. and Supp. V)). See generally Massachusetts v. United States, 435 U.S. 444 (1978).

Once the Airport and Airway Development Act was passed and the Trust Fund established, the question arose whether States and municipalities were still free to impose additional taxes on airlines and air travelers. In Evansville-Vanderburgh Airport Authority Dist. v. Delta Airlines, Inc., 405 U.S. 707 (1972), this Court ruled that neither the Commerce Clause nor the Airport and Airway Development Act precluded state or local authorities from assessing head taxes on passengers boarding flights at state or local airports. In particular the Court noted: "No federal statute or specific congressional action or declaration evidences a congressional purpose to deny or pre-empt state and local power to levy charges designed to help defray the costs of airport construction and maintenance." Id., at 721.

Following the Evansville-Vanderburgh Airport decision, Committees in both Houses of Congress held hearings on local taxation of air transportation.*fn1 Both Committees concluded that the proliferation of local taxes burdened interstate air transportation, and, when coupled with the federal Trust Fund levies, imposed double taxation on air travelers.*fn2 To deal with these problems, Congress passed § 7(a) of the

[ 464 U.S. Page 10]

     Airport Development Acceleration Act of 1973 (ADAA), the provision at issue in these appeals. See Pub. L. 93-44, § 7(a), 87 Stat. 90. That section, which is currently codified at 49 U. S. C. § 1513,*fn3 reads:

"(a) No State . . . shall levy or collect a tax, fee, head charge, or other charge, directly or indirectly, on persons traveling in air commerce or on the carriage of persons traveling in air commerce or on the sale of air ...


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