BILLINGS, Mont.—Frontier Airlines has notified Yellowstone County that it won’t be paying its $67,000 property tax bill for 2008 because it filed for bankruptcy protection earlier this year.
County Treasurer Max Lenington said the notice he received Wednesday wasn’t a surprise.
Frontier filed for Chapter 11 bankruptcy, hoping to be able to reorganize and become solvent again. The airline blamed high fuel costs and a move by a credit card processor to withhold proceeds from ticket sales until the purchaser’s flight was completed.
Lenington says tax collection agencies are priority creditors in bankruptcy cases, but the taxes don’t have to be paid until the company emerges from bankruptcy.
Lenington says Frontier’s taxes are assesed by the state based on the value of aircraft and operating property and the number of miles they fly across the state.
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Information from: Billings Gazette,
