Tax exemption on aircraft parts pursued in Maryland

Two measures, one recently aired in a Senate Budget and Tax Committee hearing and the other set for a Jan. 31 hearing of the House Ways and Means Committee, would exempt parts and components installed on aircraft from state sales and use taxes. A “sunset” provision would mandate a review of the legislation’s effectiveness at the five-year mark after enactment.

AOPA urged passage in legislative testimony and submitted a memo of support noting in part that the six-percent tax component of an aircraft-maintenance invoice gives owners incentive to take their business elsewhere—with the impact of lost revenue rippling through Maryland’s aviation economy.

“For the opportunity of significant savings, aircraft owner/operators often acquire these services out of state. As Maryland’s aviation businesses lose out, so to do their host airports—most of which are municipally owned,” it said.

The memo cited an AOPA survey of repair facilities conducted during the 2018 legislative session that suggested “how few parts and components are sold in Maryland annually” based on sales tax charges.

The evidence is clear that the tax policy puts Maryland’s shrinking aircraft-repair segment at a competitive disadvantage with repair shops from Virginia to Maine, said Sean Collins, AOPA’s eastern region manager. He testified to urge support for Senate Bill 2, sponsored by Sen. Adelaide C. Eckardt (R-District 37) and companion measure House Bill 65, sponsored by Delegate Christopher Adams (R-District 37B).

Among local aviation advocates also pressing lawmakers to approve the tax change were Austin Heffernan, owner of Royal Aircraft at Hagerstown Regional Airport; airport managers Dawn Veatch of Salisbury-Ocean City Wicomico Regional Airport and Micah Risher of Easton/Newnam Field; and Jaime Giandomenico, president of the Maryland Airport Managers Association.

Collins also encouraged AOPA members in Maryland to contact their state senator and delegate to request their support for Senate Bill 2 and House Bill 65, and to point out that “it is good for local aviation businesses, jobs, and Maryland’s system of airports.”