Wed, May 27, 2009
Exemption Set To Expire At The End Of The Year
A state sales tax exemption on
general aviation repairs, maintenance, and parts enacted five years
ago by former New York Governor George Pataki is set to expire at
the end of 2009, and some fear the move could severely damage GA in
the state.
New York aviation officials told the Albany Times Union that
many businesses have considered the tax break when deciding on a
location. Albany County Airport Authority CEO John O'Donnell told
the paper when the exemption on repairs and maintenance was
enacted, the industry "experienced a substantial boom in business".
He is also seeking sales tax relief for aircraft purchases. Other
northeastern states, including Massachusetts, Connecticut, New
Hampshire, Rhode Island, New Jersey and Delaware, offer such
incentives.
Still, not every business has endured. Eclipse Aviation has gone
into bankruptcy liquidation, closing its factory maintenance center
in Albany.
The move comes as tax receipts across the nation have declined,
and shrinking budgets have caused state legislatures to look for
increased revenue. In New York, a 5 percent luxury tax on new
general aviation aircraft costing more than $500,000 was
considered, but defeated in the State Assembly.
A study by the state Department of Taxation and Finance found
that FBO's reported increases in taxable sales after the exemption
was enacted, but would not go so far as to say whether it was a
direct result of the tax break.
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