Provides for an exemption from sales and use taxes on the sale of general aviation aircraft.
TITLE OF BILL: An act to amend the tax law, in relation to providing an exemption from sales and compensating use taxes for certain aircraft purchased in the state
PURPOSE: This bill would exempt from sales and use taxes the purchase of general aviation aircraft.
SUMMARY OF PROVISIONS: § 1- This act shall be known and may be cited as the "New York Aviation Jobs Act".
§ 2- Amends Tax Law § 1115 (dd) by amending paragraph 1 to exempt from sales and use taxation the purchase of general aviation aircraft similar to the current exemption granted to commercial service aircraft.
§ 3- Effective date.
JUSTIFICATION: Airports are one of the economic engines that fuel growth in the communities that they serve. The economic benefits of airports in this state are quite large.
Annual economic activity attributable to aviation is $36 billion. Over 300,000, New York residents owe their jobs directly or indirectly to airports. These jobs pay nearly $12 billion in payroll on an annual basis. Airports and aviation industries pay over $ 2.7 billion in state and local taxes each year.
New York air service is critical to the economic well-being of 1his state and to the traveling public. Airline commercial service is provided at 18 airports located in urban and rural areas throughout the state. In addition to commercial service airports, hundreds of other general aviation airports are located throughout the state. These airports provide services such as charter flights for businesses and executives, quick access for medical emergencies and law enforcement needs, flight training, and tourism & recreational flying.
This bill will make New York competitive with other states that already exempt sales taxes related to the purchase of general aviation aircraft. Connecticut, Massachusetts, New Jersey and New Hampshire are a few of the regional states that exempt these aviation purchases from sales and use taxes or provide more favorable tax treatment.
Since the sales tax exemption for the maintenance, repair, overhaul or rebuilding of aircraft was enacted in 2004, New York has attracted significant investment in aviation services. The recent study by the New York State Department of Taxation and Finance--A Review of the Sales and Use Tax Exemption for Private Aircraft Parts and Service---demonstrates that this particular tax exemption has been a
tremendous success, resulting in an expansion of aviation maintenance and repair businesses, the creation of jobs here in New York and an increase in state tax revenue.
Should New York exempt the purchase of general aviation aircraft, it will timber encourage existing aircraft maintenance facilities to expand their operations. In addition, other companies would look to New York to locate or relocate their business jets and operations within this state. Like the maintenance and repair exemption, an exemption for the purchase of aircraft is expected to increase state revenues and leverage significant economic returns for local communities and the state.
LEGISLATIVE HISTORY: 2007-2008: S.425-B 2009-2010: S.4551-A - Referred to Investigations & Government Operations 2011-2012: S.2678 - Passed Senate
FISCAL IMPLICATIONS: NYS Department of Taxation & Finance estimates that state and local governments will see an offset to possible tax losses with an increased amount of economic development payroll taxes, property taxes, and sales taxes in other ancillary services and increased fuel tax collections from aircraft maintenance and in-state basing as a result of the increase in aviation activity.
EFFECTIVE DATE: This act shall take effect immediately and shall apply to sales made, services rendered and uses occurring on or after such date in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law. The commissioner of taxation and finance shall be immediately authorized to adopt and amend any rules or regulations and issue any procedure, forms or instructions necessary to implement this act on its effective date.
STATE OF NEW YORK ________________________________________________________________________ 273 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sens. LARKIN, BONACIC, DeFRANCISCO, FLANAGAN, FUSCHILLO, GRIFFO, GRISANTI, KENNEDY, LITTLE, MAZIARZ, O'MARA, RANZENHOFER, RITCHIE -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations AN ACT to amend the tax law, in relation to providing an exemption from sales and compensating use taxes for certain aircraft purchased in the state THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. This act shall be known and may be cited as the "New York aviation jobs act". S 2. Paragraph 1 of subdivision (dd) of section 1115 of the tax law, as added by section 1 of part L of chapter 60 of the laws of 2004, is amended to read as follows: (1) Services otherwise taxable under paragraph three of subdivision (c) of section eleven hundred five or under section eleven hundred ten of this article, SALES OF GENERAL AVIATION AIRCRAFT, and tangible personal property purchased and used by the person who sells such services in performing such services, where such property becomes a physical component part of the property upon which the services are performed or where such property is a lubricant applied to aircraft, shall be exempt from tax under this article where such services are performed on aircraft. S 3. This act shall take effect immediately, and shall apply to sales made, and uses occurring on or after such date in accordance with the applicable transitional provisions of sections 1106 and 1217 of the tax law. The commissioner of taxation and finance shall be immediately authorized to adopt and amend any rules or regulations and issue any procedure, forms or instructions necessary to implement this act on its effective date.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01351-01-3