Dec. 23, 2015
An NBAA member company reports it is already benefitting from New York’s new sales-and-use tax exemption on general aviation aircraft and related equipment, a measure that NBAA and other aviation groups pushed for to lower the cost of doing business in the state.
Sheltair Aviation said the tax exemption is helping to clear the way for a new multi-million-dollar FBO complex at Republic Airport (FRG) in East Farmingdale, NY, about 35 miles east of Manhattan. Site preparation began this fall for the new complex, which will have as much as 210,000 square feet of hangar space. Door heights will be at least 28 feet to accommodate the latest large business aircraft.
“If state officials were hoping to see immediate results from passing the tax exemption legislation, they need look no further than state-owned Republic Airport,” said Warren Kroeppel, Sheltair’s chief operating officer. “On the very date that this tax exemption took effect, Sheltair commenced its initial site preparation phase on some 40 acres of airport property set aside and approved for this purpose.”
Sheltair, which operates 16 FBOs in Florida, Georgia and New York, and manages more than 3 million square feet of aviation-related properties, highlighted the tax exemption’s economic incentives last month at NBAA’s convention.
New York’s legislature passed the tax exemption measure to make the state more competitive with neighboring jurisdictions. The bill, originally known as the Aviation Jobs Act, was signed into law by Gov. Andrew Cuomo in April as part of the state budget and took effect Sept. 1. With state and local sales taxes formerly assessed at up to 8.75 percent of the purchase price of an aircraft, this exemption offers significant tax-planning opportunities.
Stewart Pearl, an aviation transaction attorney in Connecticut and a founding member of NBAA’s Tax Committee, said the exemption has increased industry interest in New York, altering a longtime mindset that the state was unfriendly to business aviation and should be avoided. Pearl expects that New York will undertake more hangar construction projects like Sheltair’s to meet the growing demand.
“So far, it’s wildly positive,” Pearl said. “People are reassessing the different choices this new world has given them.”