State Taxes

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Maine Lifts Burdensome Taxes on Business Aviation

June 27, 2011

The state of Maine has just taken a huge step toward making itself more welcoming to business aviation. Last week, Governor Paul LePage signed the state budget into law, including an exemption for aircraft and aircraft maintenance and repair parts from Maine's 5 percent sales tax. The new law also repeals the burdensome and forbidding use tax on new aircraft owners from out of state who brought their airplanes to Maine for more than 20 days.

"This is great for us," said Mark Goodwin, vice president of Northeast Airmotive, a fixed base operator (FBO) and repair station on Portland International Jetport (PWM). "Whether people worked in Maine, visited often or needed maintenance, the sales and use taxes were enough of a deterrent to get them to go elsewhere. We're now competing on a level playing field."

Goodwin explained that what kept most business aircraft operators away was the uncertainty factor.

"If you weren't familiar with the exact wording of the tax code, you might have wondered: 'Now, was that 20 days I could leave my aircraft in Maine or 18 days?' At that point, most operators decided to fly into New Hampshire," Goodwin said.

That same uncertainty haunted Maine's maintenance and repair facilities. "You know the tax on parts is 5 percent, but you don't know 5 percent of what," said Goodwin. "If you bring in a 1985 King Air for an annual inspection, you don't know if you're going to need a new windshield, a wheel or some other large component. A windshield for a turboprop airplane can cost $30,000. At 5 percent sales tax, that's a $1,500 additional cost just to do business in the state of Maine."

Lifting the taxes on aircraft and aircraft parts will boost Maine's economy, and is hoped to eventually have a positive effect on the budget.

"This will enable nonresidents to go to Maine and not have to worry about overstaying the 20 days," said Dean Saucier, NBAA's northeast regional representative. "Also, with the parts exemption, we're hoping that Maine residents will start using the maintenance service centers in Maine, where before they were going to New Hampshire, Connecticut, Massachusetts and a half dozen other states to the south. That was the message the industry presented to legislators: with these tax exemptions, the service centers will hopefully be busier, they'll have to hire more people and they'll pay more in business taxes."

The passage of the tax relief is a testament to the advocacy efforts of many Maine-based operators and aviation businesses, including Maine Aviation, Twin Cities Air Service, Downeast Air, Northeast Airmotive and the newly opened Brunswick Executive Airport (BXM). With support from NBAA and the Aircraft Owners and Pilots Association, the Maine business aviation community advocated for the tax relief bill introduced by state Sen. Stanley Gerzofsky.

"NBAA has been in the trenches each year we've tried to do this," said Goodwin. "We're confident it will bring more people to Maine."

For additional information, contact NBAA’s Operations Service Group at (202) 783-9250 or info@nbaa.org.