To Remain Competitive, Pennsylvania Passes Aircraft Parts and Maintenance Sales Tax Exemption

July 23, 2013

Earlier this month – after years of advocacy efforts by aircraft operators, aviation businesses, NBAA, the Aviation Council of Pennsylvania (ACP) and others – Pennsylvania Gov. Tom Corbett signed a bill that exempts the sale at retail or use of aircraft parts, services to aircraft, and aircraft components from a 6-percent sales tax.

The state already had an exemption applicable to helicopters.

“This is great news for the Pennsylvania aviation community, as businesses can now compete on a level field with other nearby states, and operators won’t have to go elsewhere for maintenance,” said Dean Saucier, NBAA’s Northeast regional representative. “The state will also benefit from increases in business and income tax revenue, as job creation in the aviation sector will lead to increased employment tax collections.”

For years, Saucier has led NBAA’s efforts to get the tax exemption passed, which included a number of call-to-action emails and postcards.

“NBAA members were instrumental in contacting their legislators, helping to make a compelling case for the exemption,” said Saucier, who also credited state Sen. David Argall and state Rep. Peter Daley with their leadership in the Pennsylvania Senate and House on the aviation tax legislation.

“We have a tremendous opportunity in Pennsylvania with over 130 airports across the state, many of which are underutilized, through this initiative,” Argall said.

Kevin Boardman, ACP president, also applauded the tax exemption. “Aircraft service centers and their associated vendors can now competitively develop in the state and attract both the local and transient business they seek,” he said. “Existing and future aircraft operators based in Pennsylvania can begin to envision opportunities to accomplish maintenance, repair and overhaul projects locally, relying on Pennsylvania’s home-grown talent.”

Saucier noted that since the inception of the rotor-wing maintenance exemption in Pennsylvania, one company alone hired 412 employees and contributed in excess of $600,000 in personal income taxes to state coffers. According to Saucier, other Northeast states such as Massachusetts, Connecticut and New York have seen an increase in aviation activity and additional tax revenue after implementing similar exemptions.

“With the state of Maine having just recently passed an aviation sales and use-tax exemption, Pennsylvania was the last Northeast state without an aviation parts and service exemption, putting it at a distinct competitive disadvantage,” said Saucier. “This legislation will ensure that aviation businesses can now fairly compete with other states in the region, and operators will not have to compromise efficiency by sending aircraft out-of-state for maintenance.”

Saucier noted that general aviation airports in Pennsylvania contribute more than $1.31 billion to the state’s economy, supporting more than 7,000 jobs.