Both Personal Property And Maintenance Taxes Axed From Final Version Of The Bill

Connecticut will continue to be an important location for business aviation, as the state's legislature passed a budget that does not contain the potentially devastating tax increases for aviation that were proposed in earlier versions. The final budget, Senate Bill 1239 has been transmitted to Governor Dannel Malloy (pictured) for his signature. NBAA members, as well as the Connecticut Legislative Aviation Caucus and the Connecticut Business Aviation Group all strongly opposed the new taxes.

Proposals in earlier versions of the budget would have imposed a personal property tax on all aircraft based in Connecticut. Currently, aircraft based in the state are required to pay a yearly aircraft registration fee. Aircraft would have been taxed at 2% tax on the first 70% of the assessed aircraft value.

In most cases, the proposed property tax would have resulted in a significantly higher tax liability for aircraft based in Connecticut. If Connecticut based aircraft had been subject to personal property tax, many owners said they would have relocated to neighboring states such as Massachusetts and Rhode Island which do not have a property tax on aircraft.

Connecticut has spent significant dollars to improve General Aviation (GA) airports such as Waterbury-Oxford (OXC). This effort has paid off as nearly 200 GA aircraft are now based at OXC alone. If a property tax were to have been imposed, many aircraft would likely move out of the state threatening the 45,800 jobs in Connecticut that depend on aviation.

With over 100 repair stations located in Connecticut, aircraft operators often fly to Connecticut from other states to have repair work done and benefit from the favorable tax treatment. If the exemption had been eliminated, as proposed in earlier versions of the budget, repair stations in Connecticut would have lost business to neighboring states such as Massachusetts or New York that have more favorable tax policies. The final bill does not eliminate the exemption for maintenance and repair.

FMI: www.nbaa.org