Monday, February 26, 2018

Georgia Lawmakers Pass Bill Without Delta Tax Break After National Rifle Association Move: Republican-led senate yanks benefit for carrier in response to its withdrawal of some flight discounts for gun-group members

ATLANTA—Georgia’s senate Thursday passed a bill promising large tax cuts for state residents but only after stripping out a provision that would have benefited Delta Air Lines Inc., punishing the carrier for ending some discounts for National Rifle Association members. 

The bill, having now passed both chambers of Georgia’s Republican-dominated legislature, heads to Republican Gov. Nathan Deal. He has said he would sign the bill, despite its lacking the jet-fuel tax break he supported benefiting Delta, Atlanta’s biggest employer.

Republican Lt. Gov. Casey Cagle, the senate president and a candidate to replace Mr. Deal, said Monday he backed dropping the jet-fuel tax break. “We should never be forced to choose between our values and growing our economy,” tweeted Mr. Cagle, an NRA supporter.

A Delta spokeswoman didn’t reply to a request for comment.

In a statement last weekend, Delta said it supported the Second Amendment but decided to cut the discounts to reflect “the airline’s neutral status in the current national debate over gun control amid recent school shootings.”

Delta was one of several corporation to sever ties with the NRA after the mass shooting at a Florida high school two weeks ago that killed 17 students and adults. A wave of calls for more gun control came in the wake of the massacre, and retailers including Walmart Inc. and Dicks Sporting Goods Inc. this week said they would stop selling firearms to shoppers under 21 years old.

In remarks Wednesday afternoon, Mr. Deal, who has prided himself on being a pro-business governor, urged people to discuss the “emotionally charged issue” with more civility and decried “the types of antics that tend to plague election years.” The NRA endorsed Mr. Deal for his 2014 re-election.

Despite the bill’s passage, Mr. Deal said he would work to secure the jet- fuel tax break at Hartsfield-Jackson Atlanta International Airport, the world’s busiest by passenger traffic and Delta’s main hub. Delta employees about 31,000 people in metropolitan Atlanta.

Appeared in the March 2, 2018, print edition as 'State Stings Delta Over NRA Move.'

Original article can be found here ➤

Conservatives in Georgia's Senate have a message for Delta Air Lines: Renew your relationship with the National Rifle Association or you will pay the price.

The state House had approved a tax break that could provide a $40 million benefit to the airline, but members of the Senate vowed to fight the deal after Delta dropped its discounted fares Saturday for members of the NRA.

Lt. Gov. Casey Cagle, a Republican, vowed Monday to kill any tax break for Delta, which is headquartered in Atlanta, unless the airline revived its discount program.

“Corporations cannot attack conservatives and expect us not to fight back,” Cagle said.

State Sen. Rick Jeffares, a Republican, said that the break was worth $40 million but that he would lead the charge against it "to let Delta know their attack on the NRA and our 2nd Amendment is unacceptable."

Delta announced Saturday that it was joining at least 10 companies in ending its discount arrangement with the NRA, and asked the gun rights group to remove its logo from the group's website. Other groups that cut ties include MetLife and Hertz.

The airline decided at its annual meeting to end the contract to reflect its neutral position in the national debate over gun control and notified the NRA on Saturday. The decision came after the shooting rampage Feb. 14 at a Florida high school that left 17 people dead.

“Out of respect for our customers and employees on both sides, Delta has taken this action to refrain from entering this debate and focus on its business,” the airline said in a statement. “Delta continues to support the 2nd Amendment.”

The announcement came just after a once-in-a-generation overhaul of federal tax law. The direct benefit from the reduction in the corporate tax rate from 35% to 21% was hit-and-miss because several airlines don’t pay income taxes.

Delta took a one-time charge of $150 million in the fourth quarter because of new tax treatment for foreign earnings and the re-evaluation of deferred tax assets. But executives said during an earnings call last month that the company projects a future all-in book tax rate of 22% to 24%.

“We obviously are not going to see any cash savings in 2018 from tax reform since we weren't anticipating paying any taxes, and we still don't anticipate paying taxes in '18,” said Paul Jacobson, Delta’s chief financial officer.

But as the company anticipates becoming a taxpayer in 2019 and 2020, it would use the benefits to more fully fund its employee pension fund, he said.

“We expect the benefit will probably be about $800 million a year at our current earnings level,” CEO Ed Bastian said. “So it'll be a significant benefit for Delta and our owners.”

The less tangible benefit is whether corporations will boost travel spending spurred by the lower payroll deductions for consumers and greater corporate investment.

“We haven't yet seen the evidence that there's going to be stimulated travel demand given that it's so early with the law just coming out over the last couple of weeks,” Bastian said.

Delta's president, Glen Hauenstein, said the company is “very excited” about the potential for business demand.

“We haven't seen that materialize yet, but we expect that to materialize in the first quarter,” he said.

Original article can be found here ➤

NEW YORK (Reuters) - The lieutenant governor of Georgia on Monday threatened to block legislation that includes lucrative tax benefits for Delta Air Lines Inc because the Atlanta-based airline dropped a partnership with the National Rifle Association after a public backlash in the wake of the recent Florida school shooting.

“I will kill any tax legislation that benefits @Delta unless the company changes its position and fully reinstates its relationship with @NRA,” Lieutenant Governor Casey Cagle, a Republican, wrote on Twitter. “Corporations cannot attack conservatives and expect us not to fight back.”

The Feb. 14 massacre of 17 students and educators at Marjory Stoneman Douglas High School in Parkland, Florida, by a gunman with a legally purchased semiautomatic rifle reignited the nation’s long-running debate over gun rights.

Several U.S. companies are cutting ties with the NRA and gun manufacturers in the wake of the shooting.

On Saturday, Delta and United Airlines Inc said they were no longer offering NRA members discounted rates and they would ask the NRA to remove their information from its website.

Delta said its decision reflected a neutral stance in the heated gun control debate. It said it continues to support the Second Amendment, which grants Americans the right to bear arms.

Delta officials could not immediately be reached for comment on Monday. The airline is one of the largest employers in Georgia.

Cagle’s tweet follows a wave of threats to boycott the carrier after Delta’s Saturday announcement.

Neither Cagle’s office nor the NRA were immediately available for comment.

The Georgia legislature is considering a proposed jet fuel tax exemption designed to benefit Delta, but as of Monday, several state Republicans have threatened to withdraw their support for the provision.

Emory University School of Law Professor Robert Schapiro said that the state has broad discretion in deciding which entities to tax or not tax.

“In terms of legality, the legislature has a broad ability to grant tax exemptions or not grant tax exemptions,” Schapiro said. “So it doesn’t violate any constitutional principle” to pull support over the NRA debate.

Cagle is running for governor of the state in the 2018 race. 

Original article can be found here ➤

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