AOPA works to cut Indiana GA aviation taxes

Current rates render the state uncompetitive in attracting new jobs and business

December 13, 2012

AOPA’s government affairs team is working with key leaders in Indiana’s legislature on a bill that could eliminate taxes on key aviation activities in the state. The state’s 2013 legislative session is important because it is a budgeting year where legislators will plan the state’s finances for the next two years.

Indiana is one of only 15 states that impose a sales tax on aviation fuel, at 7 percent, which, in combination with the excise tax, makes its cumulative tax liability one of the highest in the country. Additionally, the state’s 7-percent sales tax on aircraft maintenance (parts and labor) stifles state maintenance providers and other related businesses, who watch as aircraft are ferried out of state for repair work in states with exemptions already in place—including neighboring Ohio.

“Several other states that have previously enacted economically stimulating tax cuts and exemptions of this nature have not only experienced a resultant uptick in GA jobs and investment, but also a net-gain in overall revenue from the increased direct and ancillary economic activity,” said Mark Kimberling, AOPA director of state government affairs. “And as we have examined Indiana in particular over the past several months, it has become abundantly clear that either or both of these potential measures will indubitably boost the state’s GA industry in this same manner.”

AOPA’s government affairs team discussed the state’s aviation fuel and aircraft maintenance sales tax structure during the legislature’s summer study, laying the groundwork for relief during the upcoming 2013 Indiana legislative session.

In the past year, AOPA has had extensive talks with Rep. Brian Bosma (R), speaker of the Indiana House, and Senate Majority Floor Leader Brandt Hershman (R) to explain the detrimental effects these tax rates have on the Hoosier aviation industry and the state’s economy.

“While we are still early in the process, the conversations with Speaker Bosma and Majority Floor Leader Hershman have been very positive,” said Kimberling. “As the session nears, we look forward to continuing our discussions with these, and other key legislators, to finally spur this vital economic growth across the state.”

The Indiana legislature’s 2013 session begins Jan. 1.

Benét Wilson

Benét J. Wilson | AOPA eNewsletter and Social Media Editor

AOPA eNewsletter and Social Media Editor Benét J. Wilson joined AOPA in 2011. She is working on her private pilot certificate.