A change in state law
could make Indiana a friendlier stop for corporate pilots who've long
avoided stopping for fuel here because of high taxes.
Indiana
began exempting aviation fuel and maintenance and service work on planes
from its 7-percent state sales tax effective Monday. It has substituted
a flat 10 cents-per-gallon excise tax for fuel purchases.
Tom
McCord, sales manager at Tom Wood Aviation, which operates Metropolitan
Airport in Fishers, said the changes could save pilots hundreds of
dollars and bring in business for the 68 airplane maintenance shops
around the state.
"I think we are going to see an increase in aviation activity across the board," he told The Indianapolis Star.
The
tax cut, approved by the General Assembly this spring after intense
lobbying by the aviation industry, comes as general aviation businesses
continue to struggle since the recession crimped the budgets of many
companies using planes for business and people flying for pleasure.
McCord
said the tax change "is going to give us a competitive advantage" in
fuel sales while cutting the costs of fixing and maintaining planes and
operating planes for flight schools.
Bart Giesler, executive
director of Aviation Association of Indiana, agreed, noting that Indiana
airplane maintenance and service shops had been competing for work with
some neighboring states that eliminated their sales tax on airplane
work years ago.
Indiana repair shops "knew they were at a
7-percent disadvantage before they even started," Giesler said. "Now the
playing field is leveled."
Mark Kimberling, national director of
state government affairs for the Aircraft Owners and Pilots
Association, said Indiana's changes could bring it an aviation boom
similar to one Maine experienced after it granted its aviation
businesses sales and use-tax relief in 2011. Eleven of 12 aviation
service providers surveyed by the state said business increased, and six
said they added employees and expanded facilities.
Though tax
revenue from fuel sales goes into Indiana's general fund, it's hard to
estimate how much the state could reap from the changes. Aviation fuel
sales aren't tracked.
Airplane owners say they welcome the tax relief.
"It's
great. Our customers are thrilled they are not going to have to pay
sales taxes," said Andrea Montgomery, co-owner of Montgomery Aviation,
which runs airports in Zionsville, Frankfort and Peru.
"We were
losing a lot of business" to out-of-state airports, Montgomery said.
"Now I can advertise that we are (selling aviation fuel for) much less
than the national average."
Source: http://www.ibj.com
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