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Aviation Industry in Maine Gets Boost With Continued Sales Tax Exemption

July 12, 2013

On June 28, Maine Gov. Paul LePage signed into law a bill that exempts aircraft sales and aircraft parts from being taxed for the next 20 years.

A previous tax exemption – enacted in 2011 – was scheduled to sunset in 2015, but efforts by the LePage administration, key state legislators and a number of local FBOs and aviation businesses (supported by groups including NBAA and the Aircraft Owners and Pilots Association) resulted in the passage of this legislation.

“This is a huge victory for the Maine aviation industry,” said Dean Saucier, NBAA’s Northeast regional representative. “Many individuals worked long and hard to ensure that Maine aviation businesses now have a more level playing field with all the other New England states, none of which charge sales tax on aviation parts.”

Saucier, who provided data and assistance in support of the new legislation, noted the tax exemption will benefit the state by creating jobs and increasing indirect tax revenues from sources such as individual income, hotel stays, fuel purchases, businesses and more.

Mark Goodwin, vice president and general manager of Northeast Air, an FBO at Portland International Jetport (PWM), said that the Maine aviation industry had realized “now was the best time to prove the tax exemption was good for the state.”

Goodwin, who along with a number of other FBOs and aviation businesses testified in late March at a hearing on the proposed legislation, noted that his FBO has already benefited from the tax exemption that took effect in 2011.

“We’ve invested a half-million dollars to upgrade an existing facility and brought on three new A&P mechanics in the last two years, and we are looking for more new employees now,” said Goodwin. The FBO executive also told legislators at the March hearing that his company performed service on 17 aircraft over the past two years, worth more than $732,000 to Northeast Air.

“We know for a fact that [these] aircraft came to Maine for major service because of the tax exemption over the past two years,” Goodwin said in his testimony.

Jonathan Block, a Portland attorney with the law firm of Pierce Atwood who was the lead counsel for three of the aviation businesses that led the effort on getting the legislation passed, said that a move by some legislators nearly changed the provision to an eight-year, rather than 20-year, tax exemption.

After a lot of behind-the-scenes work, “our bill became an amendment to the Maine budget, and the amendment got the exemption back to 20 years,” said Block.

According to Block, the LePage administration – in particular, the Department of Economic and Community Development – was heavily involved in all phases of the legislation. He also credited the bill’s sponsor, Sen. Andre Cushing of Penobscot County, with leadership on getting the bill passed.