State Facing Increasing Competition From Massachusetts

A News Hampshire State House Committee is considering whether to repeal or replace airport fees imposed on aircraft registered in the state.

The New Hampshire Business Review reports that the Ways and Means committee in the state House is currently considering HB 124, which would repeal airport fees entirely. But the panel is now looking at ways to modify the bill so that fees can be "reduces" while staying "revenue neutral," meaning taxes or fees would have to be raised elsewhere to offset the reduction from the airport fees.

The state hopes to be able to attract more private aircraft, particularly business jets flown or used by corporate executives. GA already contributes some $100 million to the state's economy, according to the report, but airplane registrations are declining.

That is in part because where it costs $300,000 to base a midsize business jet in New Hampshire, it costs about $300 in nearby Massachusetts.

The fee in New Hampshire is calculated using a millage rate based on the value of the airplane. The owner of a new business jet costing $56 million would be assessed six mills, or six-tenths of one percent of the cost of the airplane. That tax bill comes to $337,500. The assessment does decline in the first five years, eventually dropping to one mill, or $56,500 in taxes in the fifth year. That rate continues for another five years, when the fee drops to a flat $15.

The bill under consideration proposes four registration fees based on the weight of the aircraft, ranging from $15,000 for aircraft over 12,500 pounds to $100 for airplanes under 4,000 pounds.

That would be in increase for people who are currently paying as little as $48 per year for airplanes that are more than 10 years old.

And, $15,000 is still far above the $300 paid in Massachusetts, so some in the legislature have questioned whether it would be enough of an incentive for owners to base their planes in New Hampshire.

Another proposal would replace the millage fee with an increase in jet fuel taxes and keep the current registration and weight fee schedule intact. Under that proposal,the tax on GA jet fuel would increase from two to eight cents per gallon, while commercial aviation jet fuel would increase from one-half cent to two cents per gallon.

Lawmakers in the state are wary of tax increases, however. So the legislature apparently still has some heavy lifting to do on the bill.

(Image from file)

FMI: Original Report