JetBlue Airways (B6, New York JFK) has commenced legal action against Florida's Department of Revenue to contest an assessment for additional corporate income taxes recently imposed for 2019 through 2021. The disputed tax bill, including interest, is USD631,632.11. The airline filed its complaint, JetBlue Airways Corp. & Subsidiaries v. State of Florida Department of Revenue (case no: 2024 CA 1177), on July 19, 2024, in the Circuit Court of the Second Judicial Circuit in Leon County, Florida.

JetBlue's complaint is that Florida's tax statutes stretch the state's borders well beyond the limits defined in the state's and the US constitution. Florida taxes airlines on a per passenger revenue mile flown within the state. The dispute only involves flights departing or arriving from an airport in Florida (JetBlue flies to Jacksonville International, FL, Orlando International, Tampa International, Sarasota/Bradenton, Fort Myers Southwest Florida, West Palm Beach International, Fort Lauderdale International, and Miami International in Florida). The case does not involve flights that may travel over Florida but do not depart or land there.

The amount of revenue miles flown within the state determines how much state tax is payable. But JetBlue says Florida is taxing them for flying outside the state's borders. Florida's constitution says the state's geographical boundaries extend nine nautical miles (16.7 kilometres) into the Gulf of Mexico and three nautical miles (5.6 kilometres) into the Atlantic Ocean. Federal law generally defines the territory of the US to include an area that is either three nautical miles or twelve nautical miles (22.2 kilometres) wide, depending on the application. Florida's tax statutes push those boundaries as far out as 450 kilometres into the Gulf and 177 kilometres into the Atlantic, depending on a particular position along the coastline. The tax department has also extended the state boundaries to include parts of Georgia and Alabama.

JetBlue computed and remitted its taxes based on the constitutional boundaries. However, during an audit, the tax department, using their own border positions, said there was a shortfall and issued the tax notice in March 2024. The amount claimed included USD483,827 for unpaid tax and USD147,805.11 for interest.

"JetBlue contests the entire amount of additional corporate income tax for the years 2019 to 2021assessed and shown on the Notice of Proposed Assessment dates March 27, 2024," the airline's filing reads.

JetBlue alleges that Florida's Department of Revenue violated state statutes and US constitutional clauses, including the federal supremacy and due process clauses, and cites six violations of the federal commerce clause.

"The commerce clause [sic]... of the United States constitution requires, inter alia, that a state tax affecting interstate or foreign commerce must be applied to an activity having a substantial nexus with the taxing state," the filing reads. "Aircraft flying outside the geographic boundaries of the state of Florida are not engaged in an activity having the requisite substantial nexus with the state of Florida."

The filing says that if every state allowed its taxing authority to extend state boundaries and tax the revenue miles flown within those boundaries, taxpayers would be subject to double taxation and be taxed on travel outside a state's borders. Florida's Department of Revenue declined to comment on the matter. ch-aviation has also contacted JetBlue for comment.

Judge Jonathan E. Sjostrom will hear the case.