Airport-funding levels key to New Hampshire tax bill
AOPA is working with lawmakers and aviation groups in New Hampshire on a legislative compromise that would restructure aircraft registration fees and aviation fuel taxes without punching a $250,000 hole in state airport funding, as a previous version of the bill would have done.
New Hampshire prides itself on not having any broad-based taxes such as a sales or income tax—often viewed as a competitive advantage from other states.
Earlier this year, AOPA opposed a version of House Bill 124 that would have repealed the state’s aircraft registration fees in a bid to compete with neighboring states because fiscal analysis indicated that the measure would have created a quarter-million-dollar shortfall in the funding of infrastructure for public-use airports. That reduction, in turn, would have resulted in lowered matching funds for federal grants, accelerating a downward spiral for state aviation funding.
AOPA called for an overhaul of New Hampshire’s aircraft registration fee structure as a key to finding a solution the association could support, said Sean Collins, AOPA’s eastern regional manager. Work on the issue has continued with local aviation stakeholders including David DeVries, president of the New Hampshire Pilots Association, Collins said.
A compromise has now emerged from the House Ways and Means Committee, where an amendment that raises registration rates gradually for small aircraft, while reducing them for larger aircraft passed on a 22-1 vote following a hearing Oct. 25. Action by the full House is expected in 2018, Collins said.
According to Committee Vice Chairman Patrick Abrami (R-Stratham), who led the subcommittee that devised the proposed solution, the new weight-based registration fee system and “modest” increases in aviation fuel tax rates would preserve the state’s current $1.25 million aeronautics funding level in a “zero sum” reform that would benefit aviation business in New Hampshire.
“We hope these changes will be enough to convince a 42-plane timeshare company based in Portsmouth to stay in New Hampshire,” he wrote in a viewpoint article in a statewide newspaper. “Without this change, they would have to pay $6,280,000 in registration fees over 10 years as they modernized their fleet. If they moved to Massachusetts, the registration fees over 10 years would be just $132,000.”
As currently amended, the bill would have light-aircraft annual registration fees rising over 10 years from $48 plus a penny a pound of the aircraft’s maximum gross takeoff weight to $100 for aircraft weighing up to 3,000 pounds; $250 for aircraft from 3,001 pounds to 8,000 pounds; $2,500 for aircraft from 8,001 to 12,500 pounds; and $3,500 for aircraft heavier than 12,500 pounds.
The tax on avgas would increase from four cents to eight cents per gallon; and for jet fuel, from two cents to 4.9 cents. For commercial operators the jet fuel rate would change from a half-cent per gallon to 2.7 cents over the same period if the amended bill passes the House in its present form.
Then the measure would be sent to the Senate, where advocates would work to sell the bill’s provisions as a “plausible solution” to the airport-funding and registration-fee issues, Collins said.
