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Indiana Shifts Tax Structure For Aviation Fuel, Maintenance

Fuel Sales Tax Replaced By An Excise Tax, Reducing Fuel Costs, Maintenance Exempted

Until July 1, Indiana had one of the highest sales taxes on aviation fuel in the nation, which meant that it was considered a "fly-over" state for a lot of pilots.

But that changed when new laws went into effect Monday. The state now exempts aviation fuel from its seven percent sales tax, and instead imposes a flat 10-cents-per-gallon excise tax on aviation fuel. The state has also removed the sales tax for maintenance and service work performed on aircraft.

Indiana has 100 public-use airports. Tom McCord, the sales manager at Tom Wood Aviation at Metropolitan Airport in Fishers, IN, told the Indianapolis Star that the changes in the tax structure could have a "significant impact" on the amount of maintenance work that is done in the state. McCord said it is likely that the state would see an across-the-board increase in aviation activity.

The tax changes came after a concerted lobbying effort on the part of the aviation industry. McCord said that he anticipates his business may increase to the point where he can hire additional flight instructors and maintenance personnel.

The state had already exempted jet fuel from the sales tax, so the change is focused on GA. Aviation Association of Indiana Executive Director Bart Giesler told the paper that the move "definitely will be a positive for the state."

FMI: www.aviationindiana.org

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