Florida could gain almost 300 high-paying jobs and millions of dollars in economic growth by reducing or eliminating the sales tax on aircraft, according to a new study commissioned by the Florida Aviation Business Association (FABA).
The study estimates elimination of the sales tax would result in the sale of 354 additional aircraft worth a total of $246 million each year.
Florida is among 15 states that tax the sale of airplanes and rotorcraft at the rate of 6%.
“One result is a loss of aircraft sales in Florida when compared to other states,” said Scott O’Brien, senior manager of finance and tax policy at the National Business Aviation Association (NBAA). ” That assertion is backed by the Fishkind study, which indicates Florida brokers and dealers lose an average of 164 transactions each year as a direct result of the state’s aircraft sales tax.”
“That’s also a problem for operators based in Florida,” said FABA Executive Director Jenny Showalter.
Florida law states any aircraft purchased within the past six months can be assessed the 6% tax if it is based in the state for more than 21 days.
“FABA believes that unfairly penalizes Florida companies for doing business here at home,” she said.
FABA, the South Florida Business Aviation Association and several other aviation advocates last year attempted to convince state lawmakers that the aircraft sales tax is hurting Florida’s economy. While that effort failed, it ultimately led to the establishment of the Florida Legislature General Aviation Caucus. Co-sponsored by state Rep. Charles Van Zant and state Sen. Thad Altman, the caucus held its first meeting Oct. 22.
“We’re hoping to have a second GA Caucus meeting in January where we’ll again communicate the importance of this issue,” said NBAA Southeastern Regional Representative Greg Voos. “Hopefully the sales tax exemption legislation will again be introduced in the 2016 session of the Florida Legislature.”
New York enacted its aviation sales tax exemption Sept. 1, 2015, after it was signed into law by Gov. Andrew Cuomo last April. That exemption applies to all general aviation aircraft without regard to size or capacity.
Florida is third in the United States when it comes to the impact of total economic impact and jobs generated by the aviation industry. The state is home to more than 200 aviation-manufacturing companies. The caucus estimates the economic impact of general aviation on the Florida economy at $7.7 billion a year.