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Wed, Apr 30, 2008

Lawmakers Debate Massachusetts Aircraft Sales Tax Exemption

And Then Vote In Favor Of Ending It...

The Massachusetts House of Representatives Monday voted to eliminate the state's five-year-old sales tax exemption on aircraft sales, parts, and maintenance. Many representatives apparently believe, like Governor Deval Patrick, that the 40 percent increase in aircraft based in Massachusetts over the last five years is just coincidence.

The Aircraft Owners and Pilots Association notes the state's revenues from aviation also increased substantially since the exemption was put in place, but lawmakers trying to fill a state budget gap want to put the tax back in place, which in theory will provide only $8 million against an estimated state budget gap of $1.3 billion.

As the Framingham Metrowest Daily News notes, that works out to only three-hundredths of one percent of the state's $28 billion budget. The paper reports more than a dozen lawmakers took the podium in two hours of debate... but the final vote was 86 to 67 in favor of ending the exemption.

Some legislators were left shaking their heads.

"Why on earth would we ever send a message to airport personnel that we don’t want you in Massachusetts?" Representative Brad Hill of Ipswich asked his colleagues. "And don’t think for a minute that businesses aren’t looking where they can save a buck, because they are. The economy is weak, not only in Massachusetts, but across the nation ... and if that buck means leaving Massachusetts they will."

Representative Sarah Peake, of Provincetown, represents a district which includes two airports. She warned the end of the waiver will result in companies moving their operations to New York or New Hampshire, which still have aviation sales tax waivers.

State Senate President Therese Murray has publicly opposed eliminating the waiver, but its not clear whether she'll be able to muster the votes to keep the exemption in effect.

FMI: www.mass.gov

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