BRUNSWICK – State lawmakers this year will consider whether to ditch an airplane tax considered troublesome for the redevelopment of Brunswick Naval Air Station.
Senate President Kevin Raye, R-Perry, and Sen. Stan Gerzofsky, D-Brunswick, have both reportedly submitted bills that would change taxation practices on airplanes weighing less than 6,000 pounds in Maine.
If they didn’t already pay a sales tax on their plane in another state, nonresident airplane owners who spend more than 20 days in Maine with their aircraft, under current law, become liable to pay state taxes equal to 5 percent of the value of the aircraft.
The Midcoast Regional Redevelopment Authority (MRRA) oversees civilian reuse of the 3,200-acre naval air station, which will be officially closed as a military installation in May. Authority officials hope to utilize the former Navy airfield to attract aircraft manufacturers and maintenance companies. But they say the state’s current tax policy on airplanes makes it expensive for pilots to bring planes here for business purposes.
“I’ve seen some pretty tall sales tax bills go out to people who didn’t know the law and brought their planes here to get service or to go on vacation,” Gerzofsky told The Times Record on Monday. “It’s a huge deterrent right now, especially because the rest of New England and most of the country has done away with this (type of airplane tax) because they see it as a jobs killer.”
Steve Levesque, executive director of MRRA, said the current tax law is an “impediment to aviation.”
“The way the law is right now, if people buy an airplane out of state that’s not taxed, and then bring it to Maine, it gets taxed,” said Levesque. “The Aircraft Owners and Pilots Association has blacklisted Maine as a place to stay away from. We want to be a destination place for people to fly in and have homes and businesses here, and we don’t want to create an artificial barrier to that.”
Gerzofsky said that representatives of Kestrel Aircraft Co., a startup airplane manufacturer planning a $100 million, 300-employee operation on Brunswick Naval Air Station property, now often land planes in Portsmouth and drive to Brunswick to avoid the 20-day taxation threshold.
“Maine’s got a big black star over it, because we’re the only state in New England that still charges this tax,” Gerzofsky said. “The owners of Kestrel have to land their plane in Portsmouth and drive up.”
When asked if a proposal to eliminate a state revenue source would gain traction in the State House during a year in which the Legislature is staring down as much as $1 billion in budget shortfalls, the Brunswick senator said he’s confident a majority of lawmakers will recognize that removing the airplane tax will improve Maine’s stature in the competitive aviation market.
Gerzofsky said his and Raye’s bills have been submitted to the revisor’s office, and likely only one will be pursued. Both are intended to accomplish the same thing, Gerzofsky said Monday, and he believes both senators, although from different parties, would advocate for whichever bill is ultimately considered by the Legislature.
“We want to get things out of the way of promoting business in the state,” Gerzofsky said. “This will be a direct jobs creator, and it will be a benefit not just to one town or the base, but to all airports in the state.
“I think we’re going to be able to show how it’s going to increase our revenues, not decrease our revenues, because you’ll have people bringing their planes here to have them serviced, and you’ll have people bringing their planes here for vacations,” he continued. “We’ll realize more revenue in the general fund because of the pickup in business. The revenue issue isn’t going to be there by the time we’re debating this, the issue is going to be creating a level playing field with the rest of New England.”
A call to Raye’s office was not returned by press time today.
http://www.timesrecord.com/articles/2011/01/04/news/doc4d2351564094f952010339.txt
Source: THE TIMES RECORD
Date: 2011-01-04