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Sat, Jun 25, 2011

Maine Legislature Thinks Better Of Aircraft Sales, Maintenance Taxes

One Sentence In Budget Document Eliminates Levies

The Maine legislature passed a budget this week that eliminates taxes for aircraft maintenance, the sale of aircraft and parts, and an onerous "use tax" ... putting the state on a level playing field for aviation taxes with other northeastern states.

Maine had a reputation for tracking down airplane owners and charging them a steep use tax if they brought their planes to the state for more than 20 days in the first year of ownership for any purpose other than maintenance. The tax amounted to five percent of the value of the airplane. It also collected a 5% tax on parts sold at Maine maintenance facilities, which sent owners to other states where no tax was collected.

Media sources including the Bangor Daily News report that a single sentence in the state's 620-page budget document eliminates those taxes. The Maine government estimates that it will cost the state a little over $600,000 per year, but independent studies indicate that other states which have enacted tax exemptions have seen growth in jobs and other revenue.


Kestrel

And the evidence of that might be nearly immediate. The owner of Maine Aviation Corp. told the Associated Press that he intends to begin construction on two new hangars and add 40 people to his workforce. The exemption is also expected to attract aviation-related businesses to the recently-closed Brunswick Naval Air Station, which is now under private management by the Midcoast Regional Redevelopment Authority. The new Kestrel aircraft company has already located at the former Navy facility, and they are hoping for much more.

FMI: www.maine.gov/legis

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