Thu, May 05, 2011
Both Personal Property And Maintenance Taxes Axed From Final
Version Of The Bill
Connecticut will continue to be an important location for
business aviation, as the state's legislature passed a budget that
does not contain the potentially devastating tax increases for
aviation that were proposed in earlier versions. The final budget,
Senate Bill 1239 has been transmitted to Governor
Dannel Malloy (pictured) for his signature. NBAA
members, as well as the Connecticut Legislative Aviation Caucus and
the Connecticut Business Aviation Group all strongly opposed the
new taxes.
Proposals in earlier versions of the budget would have imposed a
personal property tax on all aircraft based in Connecticut.
Currently, aircraft based in the state are required to pay a yearly
aircraft registration fee. Aircraft would have been taxed at 2% tax
on the first 70% of the assessed aircraft value.
In most cases, the proposed property tax would have resulted in
a significantly higher tax liability for aircraft based in
Connecticut. If Connecticut based aircraft had been subject to
personal property tax, many owners said they would have relocated
to neighboring states such as Massachusetts and Rhode Island which
do not have a property tax on aircraft.
Connecticut has spent significant dollars to improve General
Aviation (GA) airports such as Waterbury-Oxford (OXC). This effort
has paid off as nearly 200 GA aircraft are now based at OXC alone.
If a property tax were to have been imposed, many aircraft would
likely move out of the state threatening the 45,800 jobs in
Connecticut that depend on aviation.
With over 100 repair stations located in Connecticut, aircraft
operators often fly to Connecticut from other states to have repair
work done and benefit from the favorable tax treatment. If the
exemption had been eliminated, as proposed in earlier versions of
the budget, repair stations in Connecticut would have lost business
to neighboring states such as Massachusetts or New York that have
more favorable tax policies. The final bill does not eliminate the
exemption for maintenance and repair.
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