June 10, 2011 By Sarah Brown
Flying into Maine could go from a costly tax gamble to an enticing proposition under a bipartisan budget up for vote in the state legislature.
The Maine Legislature’s Appropriations and Financial Affairs Committee agreed on a budget in the early hours of June 10 that would repeal a use tax that can slap out-of-state owners of new aircraft with bills for up to 5 percent of the aircraft’s value. The budget also would add a complete sales tax exemption on aircraft sales and parts for all aircraft owners. The agreement is a dramatic shift for Maine, which notoriously hit one out-of-state aircraft owner with a nearly $26,000 bill for visiting the state in his Cirrus SR22.
“Maine’s use tax had long deterred pilots from visiting the state and put it at a competitive disadvantage with neighboring states in attracting new business and investment,” said AOPA Director of State Government Affairs Mark Kimberling. “Now, with passage of the budget, it could swiftly become one of the most GA business-friendly states in the nation.”
AOPA has been working for years to convince state leaders to take action against the use tax, which went into effect in 2007. This year, Kimberling and AOPA Northeast Regional Representative Craig Dotlo worked with the Senate’s new President, Kevin Raye, a Republican, along with key Democrats in the House and Senate, to renew the effort to repeal the economic impediment. Bipartisan support, and a focus in both houses of the legislature on creating a more business-friendly tax climate, helped the repeal and exemptions make it into the budget agreement.
The $6.1 billion two-year budget needs a two-thirds vote in both chambers of the legislature, and is expected to be taken up very quickly in the next several days.