June 15, 2011
By Sarah Brown
Flying into Maine just went from a costly tax gamble to an enticing proposition under a bipartisan budget signed by Gov. Paul LePage June 20.
The budget repeals a use tax that can slap out-of-state owners of new aircraft with bills for up to 5 percent of the aircraft’s value. The budget also adds a complete sales tax exemption on aircraft sales and parts for all aircraft owners.
The Appropriations and Financial Affairs Committee agreed on the budget in the early hours of June 10, and the legislature approved it the following week. The agreement is a dramatic shift for Maine, which notoriously hit one out-of-state aircraft owner with a nearly $26,000 bill for visiting the state in his Cirrus SR22.
“Maine’s use tax had long deterred pilots from visiting the state and put it at a competitive disadvantage with neighboring states in attracting new business and investment,” said AOPA Director of State Government Affairs Mark Kimberling. “Now, with the governor's signature, it has swiftly become one of the most GA business-friendly states in the nation.”
AOPA has been working for years to convince state leaders to take action against the use tax, which went into effect in 2007. This year, Kimberling and AOPA Northeast Regional Representative Craig Dotlo worked with the Senate’s new President, Kevin Raye, a Republican, along with key Democrats in the House and Senate, to renew the effort to repeal the economic impediment. Bipartisan support, and a focus in both houses of the legislature on creating a more business-friendly tax climate, helped the repeal and exemptions make it into the budget agreement.
“I am delighted that the Appropriations Committee’s unanimous proposed biennial State Budget includes my bill to reform Maine’s horrendous tax policy on visiting aircraft,” Raye said after the committee agreed on the $6.1 billion two-year budget. “It is my sincere hope that soon independent aviators will again be able to visit Maine without fear of receiving a tax bill for their stay.”
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