New Yorkers who are considering buying an aircraft that will be based in the state can save at least 4 percent starting Sept. 1 since Gov. Andrew Cuomo signed the aircraft sales-and-use tax exemption as part of the new state budget. (See page 82, section 21-A of the bill for details of the exemption.)
The sales-and-use tax exemption applies to all general aviation aircraft, whether experimental, light sport, or certificated; piston or jet. There are no size or capacity restrictions.
Michael Giardino, president of the New York Aviation Management Association, said the tax exemption “levels the playing field” with nearby states that have similar exemptions and removes the temptation for New Yorkers to base their aircraft outside the state.
“You can bring your aircraft home,” Giardino said. The state aviation association has been focused on this initiative for nearly a decade, he added.
What kind of savings does this exemption translate to for aircraft owners? A pilot in the market for a $50,000 used aircraft, like Cessna 172 or Van’s Aircraft RV-6, would save at least $2,000 on upfront purchase costs. Considering the average cost of avgas at New York FBOs is $5.80 per gallon, according to Airnav.com, the pilot could use that savings to buy enough avgas for 34 hours of flight time (based only on fuel costs and a conservative fuel burn of 10 gph). Someone buying a 2015 Cirrus SR22 GTS for about $700,000 would save at least $28,000.
“AOPA works hard with state aviation industries to reduce barriers to entry and lower the cost of aircraft ownership,” said Sean Collins, AOPA Eastern regional manager. “Because the state retains the 2004 tax exemption on aircraft maintenance this new sales-and-use tax exemption makes ownership a lot easier!”
As AOPA has reported, New York’s previous tax structure had caused many to purchase and base their aircraft in surrounding states with better tax policies. AOPA and the New York Aviation Management Association estimate that since 2002 the state has lost nearly 700 based aircraft, causing New York’s airports to struggle as a result of the competitive disadvantage.
The New York Aviation Management Association, AOPA, and other organizations worked closely to educate lawmakers on the benefits of the exemption to the state. AOPA noted that based on the results other states have had by enacting friendlier tax policies, New York could expect to see hundreds of new jobs created as well as increased aviation activity and revenue. Giardino pointed out that the new jobs being created would be in high-quality aviation career tracks. According to the state’s Department of Transportation, “direct impacts per airplane are up to five on-airport jobs and approximately $1 million in annual economic activity.”