Wednesday, March 05, 2014

Tax breaks at Colorado Springs Airport to be considered by City Council

City Council President Keith King says an aviation company with 40 "high paying" jobs is waiting in the wings, ready to move to Colorado Springs.

The holdup? Unlike most other U.S. airports, Colorado Springs does not have a special zone that would give companies like Rampart Aviation a break on sales and use taxes.

King plans to offer a remedy Monday when he presents an ordinance to council members to create a Commercial Aeronautical Zone around the airport. Businesses that lease, sell, repair or maintain aircraft would be exempt from most city sales and use taxes if they set up shop in the zone.

The ordinance would not eliminate the business tax on property such as Xerox machines and computers, however, nor would it affect taxes levied by El Paso County.

But it's a necessary business move, backers say. In an announcement about the proposed ordinance, King said the creation of the zone is expected to entice North Carolina-based Rampart Aviation "to move their company and 40 high paying jobs to Colorado Springs."

"But they want to make sure the legislation gets passed first," he said.

Dan Gallagher, interim director of Colorado Springs Airport, said eliminating the taxes would create a level playing field with the nation's other airports. He said the Springs airport is the only airport on the Front Range, and one of the few small-to-medium hub airports in the country, that still charges sales and use tax on aviation equipment and supplies.

Gallagher said that around 2007, the city started charging aircraft owners a 2.5 percent sales tax on the value of their airplanes, helicopters and other aircraft based at the airport. The tax prompted more than 20 percent of the aircraft owners to flee the area that year, reducing airport revenues from avionic and fuel sales, aircraft maintenance and repairs and state grants in the following years, Gallagher said.

Gallagher believes the creation of the Commercial Aeronautical Zone will persuade several aviation companies to come to Colorado Springs. He said as many as three West Coast firms are awaiting the outcome of the proposed legislation. Two of those companies could operate as many as 10 additional aircraft at the local airport, including "multiple 727s and twin engine planes," he said.

He did not know how many total jobs those companies might bring to the area but said it could be as many as 100 jobs combined.

"If you look at our high concentration of retired military and the trained workforce and the cost of living, we are in a sweet spot," he said. "And if you layer in economic incentives with that, it puts us on par with other airports."

Existing airport businesses that fall within the Commercial Aeronautical Zone, such as Sky West, also would benefit.

The council won't immediately vote on the ordinance. King expects it will come up for a vote in April. Councilman Merv Bennett said Monday that he'd likely support the ordinance, depending on the final draft. "We are the only airport with general aviation in the state that has these taxes, and it is not conducive to business," he said.

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