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Bay State eyes aircraft taxBay State eyes aircraft tax

Shoreline Aviation staff maintain aircraft at Marshfield Municipal Airport in Massachusetts, part of a $16.6 billion industry that supports more than 162,000 jobs after years of growth.

Aviation advocates made clear to Massachusetts lawmakers that a proposed repeal of sales-and-use tax exemptions on aircraft sales could undo one of the state’s major economic success stories in the past decade.

Testifying July 9 before the Joint Revenue Committee, Massachusetts Airport Management Association Executive Director David Dinneen noted that absence of aircraft taxes repealed in 2002 helped fuel an aviation boom that continues today. Between 2011 and 2014, total economic activity tied to aviation climbed $4.7 billion, from $11.9 billion to $16.6 billion, according to studies commissioned by the state. Aviation payroll grew $1.2 billion (to $6.1 billion) and by 38,000 jobs, with more than 162,000 people now working in aviation jobs statewide.

“It’s pretty dramatic to see,” said Dinneen, among several members of the aviation community who supplied testimony. “The economy’s been finally getting better, and you can see how things have really improved with aviation … aviation is working in Massachusetts and the latest studies are proving that.”

Neighboring states have taken notice, with New York recently joining New England states that have repealed aviation taxes in the interest of attracting aviation business. AOPA Eastern Regional Manager Sean Collins noted in his own testimony that exempting aircraft sales as well as maintenance from taxes has a powerful effect.

“This combination attracts the greatest number of aircraft, directly supporting aviation jobs and the airports that rely on them,” Collins noted. The 2002 repeal of taxes on general aviation helped fuel an increase in activity that now generates $800 million in state and local revenue each year, Collins added in voicing AOPA's opposition to the pending bill. (The proposed legislation would leave the exemption on aircraft maintenance intact, but impose taxes on aircraft sales and storage.)

Dinneen said he was pleased to see many advocates reinforcing the message.

“When situations like this arise every aviator, every aviation business, anybody that uses aviation needs to reach out to their legislators,” Dinneen said.

Jim Moore

Jim Moore

Editor-Web
Editor-Web Jim Moore joined AOPA in 2011 and is an instrument-rated private pilot who enjoys competition aerobatics.
Topics: Advocacy, Taxes, Financial

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