State Taxes - New York

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Economy-Boosting New York GA Sales Tax Exemption Moves Closer to Passage

March 21, 2014

In New York, a years-long effort to pass the Aviation Jobs Act, establishing a sales- and use-tax exemption for general aviation (GA) aircraft, is closer to succeeding than ever before. The state Senate has included the exemption in its proposed budget, and a joint conference committee with the state Assembly is meeting to finalize the budget.

In past years, the Aviation Jobs Act, with support from the New York Aviation Management Association (NYAMA), NBAA and local aviation groups, as well as the New York Legislative Aviation Caucus, has passed in the Senate, but has not been approved by the Assembly or been a part of final budget negotiations.

“Including the exemption in the budget proposal shows how committed state Senate leaders are to boosting New York’s economy by supporting their aviation industry,” said NBAA Senior Manager of Finance and Tax Policy Scott O’Brien.

Across New York, aviation supports more than 394,000 jobs with a total payroll over $18 billion. According to the New York State Department of Transportation (NYSDOT), the economic impact of GA airports alone is $1.06 billion.

Those numbers should actually be higher, according to supporters of the tax exemption. In a memo circulated to legislative colleagues, the bill’s co-sponsor, state Sen. Bill Larkin, points out that New York is surrounded by states that have all stopped taxing the sale and use of GA aircraft.

Since Massachusetts enacted a similar exemption in 2001, the number of aircraft based in the state has risen by 40 percent. Meanwhile, “New York has lost 700 such aircraft since 2002,” according to Larkin.

NYSDOT estimates that each new aircraft the exemption brings to New York would create an average of five airport jobs and $1 million in economic activity, more than offsetting the revenue the state currently collects from the sales and use tax in new payroll taxes, property taxes, fuel taxes and sales taxes for ancillary services.

“Passing this sales and use tax exemption will make New York more competitive with neighboring states, create jobs and have a positive economic impact, just as the maintenance tax exemption has proven,” said NBAA Northeast Regional Representative Dean Saucier.

Since the legislature passed the tax exemption for aircraft maintenance in 2004, NYSDOT reports that New York’s maintenance and repair industry increased employment and tax revenue.

That’s exactly the case that local groups and NBAA have been making to legislators, and at Aviation Advocacy Day in Albany on March 12. Through their efforts, the New York Legislative Aviation Caucus, co-chaired by Larkin and Assemblywoman Donna Lupardo has grown to more than 100 members.

“NYAMA, all the local groups and NBAA have been pushing very hard, coordinating our efforts,” said Saucier. “We are gaining supporters in the Assembly, but we still need more support.”

NBAA encourages New York-based Members to contact their representatives in Albany and support the Senate’s budget proposal.

Read NBAA’s Call to Action: Support New York Aviation Jobs Act.