Tax issues a concern in California

The Honorable Ellen M. Corbett
Chair
Assembly Revenue and Taxation Committee
California State Legislature
State Capitol
Sacramento, CA 95814

Dear Chairperson Corbett:

The Aircraft Owners and Pilots Association (AOPA) is a membership association consisting of over 392,000 pilots and aircraft owners nationwide, 48,270 of whom reside in the state of California. AOPA is committed to ensuring the continued viability, growth, and development of aviation and airports in California and the United States.

It is our understanding that Assembly Bill 694 is presently before the Assembly Revenue and Taxation Committee. This bill would modify the Revenue and Taxation Code relating to taxation of vehicles, vessels, and aircraft. AOPA is concerned the provisions of Assembly Bill 694 could have a negative impact on prospective aircraft owners in California.

Tax laws vary greatly from state to state; however, in AOPA's nationwide experiences the provisions of A.B.694 are unusually restrictive for aircraft purchased outside the state. Aircraft are unique, and it is not unusual for a prospective buyer to travel several thousand miles to purchase the "right" aircraft. Many states, including states that border California, offer more relaxed presumptions for aircraft purchased outside the state or exemptions for casual sales.

Assembly Bill 694 could put California at a competitive disadvantage for aircraft sales and may discourage perspective aircraft purchasers from making the investment. Considering the annual economic impact of general aviation to the state of California is well over $5.5 billion, the state cannot afford to encumber such a valuable industry. AOPA urges you to reconsider Assembly Bill 694 and to preserve the present 90-day presumption for aircraft purchased outside the state.

Should you have any further questions, do not hesitate to contact me at 301/695-2221 or AOPA's California Regional Representative John Pfeifer at 530/226-5117.

Sincerely,

Andrew V. Cebula
Senior Vice President
Government and Technical Affairs

March 11, 2003