Provides for an exemption from sales and use taxes on the sale of general aviation aircraft and for a report on the economic impact thereof

11 Co-sponsors

• James S. Alesi
• John J. Bonacic
• John A. DeFrancisco
• John J. Flanagan
• Charles J. Fuschillo Jr.
• Owen H. Johnson
• Vincent L. Leibell
• Betty Little
• Michael F. Nozzolio
• Dale M. Volker
• George Winner

Title of bill

An act to amend the tax law, in relation to providing an exemption from sales and compensating use taxes for certain aircraft purchased in the state; and to amend chapter 60 of the laws of 2004, amending the tax law relating to exempting parts used exclusively to maintain, repair, overhaul or rebuild aircraft or services associated therewith from the sales and compensating use tax, in relation to eliminating the expiration of the provisions thereof

Purpose

This bill would repeal the December 1, 2009 sunset of the sales tax exemption on the maintenance, repair, overhaul or rebuilding of aircraft and to exempt from sales and use taxes the purchase of general aviation aircraft.

Summary of provisions

Section 1: Amends Tax Law section 1115(dd) by amending paragraph 1 to exempt from sales and use taxation the purchase of general aviation aircraft similar to the current exemption granted to commercial service aircraft.

Section 2: The effective date provisions of the bill.

Existing law

There is currently no exemption for the sale of this type of equipment.

Justification

Airports are one of the economic engines that fuel growth in the communities that they serve,. The economic benefits of airports in this state are quite large.

- Annual economic activity attributable to aviation is nearly $36 billion. - Over 300,000 New York residents owe their jobs directly or indirectly to airports. These jobs pay nearly $12 billion in payroll on an annual basis. - Airports and aviation industries pay over $2.7 billion in state and local taxes each year.

New York air service is critical to the economic well being of this state and to the traveling public. Airline commercial service is provided at 18 airports located in urban and rural areas throughout the state. In addition to commercial service airports, hundreds of other general aviation airports are located throughout the state. These airports provide services such as charter flights for businesses and executives, quick access for medical emergencies and law enforcement needs, flight training, and tourism & recreational flying.

This bill will make New York competitive with other states that already exempt sales taxes related to aviation activities. Connecticut, Massachusetts, New Jersey and New Hampshire are a few of the regional states that exempt these aviation sales and use taxes.

Should New York exempt the purchase of general aviation aircraft, it will further encourage existing aircraft maintenance facilities to expand their operations. In addition, other companies would look to New York to locate or relocate their operations within this state. This would reduce the cost of providing services for other companies that are located in New York. While this bill will reduce state revenue by a relatively small amount, it will leverage significant economic returns for local communities and the state.

Legislative history

Similar to Senate Bill S.6114/A.9716 of 2004, S.3655-A of 2005/2006, S.425-B of 2007/2008

Fiscal implications

NYS Department of Taxation & Finance estimates that there will be some loss in state and local sales taxes collected, however, state and local governments will see an offset to this tax loss with an increased amount of economic development, payroll taxes, property taxes, and sales taxes in other ancillary services and increased fuel tax collections from aircraft sales and maintenance.

Local fiscal implications

None.

Effective date

This act shall take effect on the December following the date it becomes law.