Tue, Jun 05, 2012
Says Exemption Would Spur Local Economy
A Washington County, PA legislator believes the state’s aviation industry would expand if the tax on aircraft sales and maintenance was dropped. Rep. Peter Daley (D) introduced a tax repeal bill that passed the House one week ago, said “We’re the only northeastern state without some sort of exemption. We’ve got to do everything we can to be competitive.”
The TribLive reports that the opponents of Daley’s bill maintain the state cannot afford to forgo any revenue, and shouldn’t give tax breaks to aircraft owners. "I don't think we should be giving tax breaks to people who fly corporate jets. When a working family goes out to buy a car, they don't get a tax exemption" said Rep. Martin Schmotzer. The bill passed in the House by a 179-19 vote.
The state of Pennsylvania charges a 6% tax on aircraft sales and maintenance work and parts. The result of this according to Daley is that many of the state’s 7,800 GA aircraft go out of state for maintenance.
"We have certainly lost business" because of the taxes, said David Friend, owner of Washington County Airport-based Cheyenne Air Service, which specializes in maintenance of Piper and Beechcraft turboprops and Cessna Citation jets. The maintenance jobs Cheyenne Air Service tackles typically cost between $75,000 and $500,000 which means an additional expense of $4,500 to $30,000 for the aircraft owner. He added "Plane owners look at the bottom line. If they can avoid that added cost, why would they come here?"
The state’s department of revenue estimates the tax measure would cost Pennsylvania about $12.4 million a year in lost revenue. Daley counters that the state would make at least as much in income taxes within three years if employment at aviation maintenance facilities grows to meet the expected increased demand.
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