The Connecticut legislature has passed a $40.1 billion, two-year state budget package that does not include two tax proposals that could have devastated the state’s aviation industry.
The budget package, signed May 4 by Gov. Dannel P. Malloy, dropped a proposed personal property tax on aircraft. It also passed without eliminating a sales tax exemption on labor performed for aircraft maintenance.
The budget passed the Senate 19-17 in the wee hours May 4, after clearing the House May 3 on an 83-67 vote that capped 10 hours of debate.
As AOPA reported March 2, the personal property tax—2 percent on the first 70 percent of an aircraft’s assessed value each year—combined with Connecticut’s existing registration fees, would have created extremely high costs for basing aircraft in the state, and could have led to widespread relocations of aircraft across state lines.
Had the sales tax exemption on labor been eliminated, the result would have been a major competitive disadvantage for the state’s 101 repair shops. All but one other New England state has the exemption in place, and the single exception, Maine, is now considering legislation for an exemption.
AOPA worked with a coalition of local aviation businesses and pilots, including the Connecticut Business Aviation Group (CBAG) and the National Business Aviation Association, throughout the legislative process, pressing home the importance to the state’s aviation industry of removing the personal property tax from the package, and preserving the sales tax exemption.
Over the course of several weeks, AOPA met with Malloy, his budget advisers, legislative leadership, and committee chairmen, as well as individual lawmakers on many occasions.
"This is definitely good news for the entire Connecticut aviation community,” said Mark Kimberling, AOPA director of state government affairs. “It is the result of very careful collaboration between AOPA and several state aviation businesses and pilots.”
Kimberling commended the legislature, especially its leadership, “for their ultimate decision to forego this tax proposal after very careful consideration and deliberation of this issue in the face of numerous difficult budget decisions.”
“In the end, this issue was really a decision to foster, rather than stifle, new growth of a critical sector of their economy in GA. This decision will certainly pay off in terms of saving businesses, jobs, and in generating revenue long term," added Kimberling.
AOPA Aviation Summit 2011 is scheduled to take place in Hartford, Conn., Sept. 22 through 24.