Records show Surf Air owes county $328,371 in taxes


The commuter airline Surf Air has hardly been in the good graces of a vocal contingent of area residents bothered by its noisy planes flying overhead since it started using the San Carlos Airport. But the San Mateo County tax collector isn't likely to be looking favorably on the company either, given that, according to public records, the airline owes the county hundreds of thousands of dollars in taxes.

The airline, which confirmed on Oct. 5 that it would resume flights at the county-owned airport later this month after a brief hiatus, owes the county $328,371.69 in taxes, according to county documents updated Oct. 10. Aside from financial penalties for not paying the taxes on time, county assistant tax collector Robin Elliott said she is not aware of nonfinancial penalties, such as not being able to use the airport.

Surf Air paid off $57,613.60 in 2017 county taxes. It still owes the county $7,407.14 for 2014 taxes, $91,521.17 for 2016 taxes, $79,364.48 for 2017 taxes and $150,078.90 for 2018 taxes, according to county records. The charges have penalties attached to the bills since Surf Air did not pay as of Aug. 31, according to Jim Irizarry, assistant assessor-county clerk-recorder and chief elections officer.

The county taxes Surf Air's planes, which are considered business property. It's a complicated formula, but factors that go into determining the business property tax are the value of the aircraft and how many hours the aircraft spends in the county, Irizarry said. The county controller's office calculates the tax after the assessor evaluates the property value, he said. The tax collector levies the penalties, he said.

Surf Air is in active discussions with local tax authorities and is working through a resolution, a company spokesperson wrote in an Oct. 16 email.

In August, the federal government reported that Surf Air owes $2.33 million in taxes. At the time, officials reported that Surf Air owed the county $131,371 for 2017 taxes and could owe more for 2015 and 2016.

Surf Air is "nearly at an end" of settlement negotiations with Encompass Aviation, a Surf Air spokesperson said in an email. In mid-June, Surf Air replaced Encompass Aviation LLC with Advanced Aviation LLC as its flight operator. Days later, Encompass sued Surf Air, claiming $3.1 million in unpaid bills.

Surf Air countersued Encompass, asking that Encompass return the PC-12 turboprop planes it subleased from Surf Air. Surf Air claimed at least $10 million in damages.

Two of the PC-12s are already back in the Surf Air fleet and the company expects to have them all back very soon, the spokesperson wrote. Steve Harfst, president and CEO of Encompass, declined to comment on the negotiations.

Surf Air has not settled on the number of flights it will operate out of San Carlos Airport when it returns later this month. In August, airport manager Gretchen Kelly confirmed that the airline had stopped using the airport, saying that the last record the airport had of a Surf Air plane landing there was June 29. She said at the time that workers affiliated with Surf Air indicated the airline may be back in October.

Kelly said on Oct. 9 that the airport hasn’t officially heard from Surf Air about its plans to return. The airline has an operating agreement with the airport in which Surf Air pays the airport a percentage of its revenue and landing fees, she said.

"We're obviously concerned about our neighbors, but also trying to maintain a successful airport," Kelly said.

The Surf Air spokesperson said that when the airline returns to San Carlos Airport, "flight operations will start slowly to make sure we are operating in ways that reduce our noise footprint. If all goes well, we'll gradually increase the number of flights while continuing to operate out of Oakland Airport."

A startup airline that began using the San Carlos Airport in June 2013, Surf Air offered unlimited flights for a monthly fee and scheduled as many as 45 flights a day in and out of the airport.


16 people like this
Posted by Jim P
a resident of Menlo Park: other
on Oct 12, 2018 at 10:08 am

Jim P is a registered user.

There are repercussions when we regular people don't pay our taxes. Penalties, fees, property in tax default, foreclosure, auction. Even the trolls that visit this dialogue must agree that something is wrong with this picture. The airport wants to maintain a successful airport and the County does not enforce the law. Where do we sign up for this privileged exception to the laws?

10 people like this
Posted by Q&A
a resident of another community
on Oct 12, 2018 at 10:50 am

SEE QUESTIONS FOR SURF AIR (BELOW) POSTED IN THE COMMENTS SECTION OF AN OCT. 5th ALMANAC ARTICLE – “SURF AIR TO RETURN TO SAN CARLOS AIRPORT…” Perhaps one of the questions was partially answered in this latest article, that Surf Air may be getting it's PC-12s back. But we're awaiting a response to the other questions, below.

Posted by Q&A
a resident of another community
on Oct 8, 2018 at 10:14 pm
Hey, Surf Air spokesperson! Some questions for you: You mention in The Almanac article that “We’ve worked closely with the community…to identify ways to reduce our noise footprint, which we believe we’ve addressed by modifying our schedule and using a quieter type of aircraft.” Can you provide details? Like, how exactly will you be modifying your schedule and reducing your noise footprint? What type of quieter aircraft will your airline be flying over Peninsula communities? And who have you worked closely with in the community?

And one more question. According to The Almanac article, Surf Air is asking for the “return of the PC-12 turboprop planes” in a pending lawsuit. So, if Surf Air gets those planes back, the planes you were using before you suspended service at San Carlos Airport, will your airline be using those PC-12s or “a quieter type of aircraft?”

Looking forward to your response

10 people like this
Posted by Justin
a resident of Atherton: Lindenwood
on Oct 12, 2018 at 6:42 pm

"We're obviously concerned about our neighbors, but also trying to maintain a successful airport," Kelly said.

Kelley, do you mean that the airport wasn't successful before surf air existed for over 50 years? The airport is only successful because of surf air?

Also, thanks for the concern! The bay area people are concerned with you and wanna know when this place will be shut down as well!

13 people like this
Posted by Menlo Voter.
a resident of Menlo Park: other
on Oct 12, 2018 at 6:45 pm

Menlo Voter. is a registered user.

If Surfair owes the taxes, they shouldn't be allowed to use the airport until they make their debt current.

5 people like this
Posted by Q&A
a resident of another community
on Oct 13, 2018 at 9:31 am

Since it’s possible there may not be a response to various questions posed in our previous posts here in The Almanac -- we’re not aware of a response, so far – we have another question:

Surf Air has said (see Q&A's comment posted above): “We’ve worked closely with the community…to identify ways to reduce our noise footprint…” So we asked previously, along with other questions, for details regarding who Surf Air has been working closely with. Can something about that be provided? Maybe something about community groups Surf Air has reached out to? Or something about individuals in Peninsula communities the airline has been working with? That's another question for Surf Air.

6 people like this
Posted by Q&A
a resident of another community
on Oct 13, 2018 at 4:34 pm

Here’s another question one could ask Surf Air:

While people who’ve signed up to travel on your planes would naturally be thrilled at the prospect of renewed service at San Carlos Airport, are you worried about people in Peninsula communities who have been expressing concerns about noise and other matters? You’re serving some 5,000 members, isn’t that the number reported in news media? But haven’t media also reported some 150,000 people in communities along your route impacted by your planes? Doesn’t this suggest you’re going to be facing ongoing problems?

16 people like this
Posted by Concerned Citizen
a resident of another community
on Oct 14, 2018 at 4:23 pm

A company that owes 328K in back taxes to the county, and 2.3M in taxes to the federal that the type of company that should be allowed to come back??? Amazing.

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