Member action helps, but tax exemption still on block

April 17, 2008

Member action helps, but tax exemption still on block

By AOPA ePublishing staff

Thanks, in part, to quick action from AOPA members, a proposal to repeal Massachusetts’ tax exemption on aircraft sales and parts won’t be part of a tax reform package being considered by the state House of Representatives. But the fight to save the exemption isn’t over yet.

Last week, when AOPA learned of plans to add language eliminating the aircraft tax exemption to a broad tax reform bill, AOPA staffers, including Northeast Regional Representative Craig Dotlo, began calling legislators, urging them not to put the exemption on the chopping block. AOPA also asked members to contact their legislators and express opposition to eliminating the exemption. Members responded and so did lawmakers, leaving the exemption out of the reform bill.

But the exemption still isn’t safe. Gov. Deval Patrick’s budget proposal would eliminate the tax exemption, first instituted in 2002. Without the exemption, aircraft, maintenance, and flight instruction all would become more expensive, and some aviation service providers could be forced out of business or out of the state. In fact, a 2005 state-sponsored study showed that after the 5-percent sales-and-use tax exemption was instituted, the state’s aviation revenues increased significantly, the number of based aircraft rose by 40 percent, and the numbers of business-owned and multiengine aircraft doubled.

April 17, 2008