The state house is expected to take up a bill soon that would eliminate a sales and use tax on aircraft sales, parts, maintenance and repair. Supporters say Pennsylvania is losing out to neighboring states, which have enacted some type of tax reform on fixed wing aircraft.
Representative Peter Daley (D-Fayette/Washington) says HB 1100 is not about a tax break for the wealthy; it’s about creating and retaining jobs. He says when a similar measure was passed for helicopters; a company in West Chester added more than 400 jobs. He says if HB 1100 is enacted, it will open up the door for the aviation industry to set up shop at Pennsylvania airports with businesses that service aircraft, sell parts, perform routine inspections and even build and sell aircraft.
Representative Daley says similar measures have worked in Ohio and New York.
Craig Stephan, Vice President of Cheyenne Air Service in Washington PA, says the tax has affected their operations. He says one of their main challenges has been in the avionics area. He says they’ve had to cut back and lay off personnel from good, family sustaining jobs. He says eliminating the tax would boost business.
John Graham III, President of the Pittsburgh Institute of Aeronautics, says 80% of their graduates go to jobs in other states. He says it’s time to stop the brain drain. He says Pennsylvania should not be chasing talent away over a tax that generates so little revenue and could hinder business.
Representative Rick Mirabito (D-Lycoming) says they’re seeing a huge increase in the number of planes coming into the Williamsport Regional Airport due to the Marcellus Shale boom, and this bill could help create jobs. Right now, he says people are literally flying over the state to do their maintenance and repair in other places.
Representative Dan Moul (R-Adams/Franklin) is a private pilot, and he believes the tax is costing Pennsylvania business. He says when other states around us have a 6% advantage, before companies in this state even put out a bid for work, you can understand very quickly why the jobs are leaving Pennsylvania.
In December, the Pennsylvania Budget and Policy Center called the bill a luxury tax break that would create a subsidy for wealthy Pennsylvanians. The center says similar aircraft industry tax breaks have failed to deliver on jobs in other states.