Starting July 1, 2020, pilots in Maryland no longer have to fork over 6% sales tax on aircraft parts and components.
The passage of S.B.121 makes Maryland the 10th state in the Eastern region to pass a sales tax exemption on aircraft parts, which is expected to drive competition, jobs, and aeronautic activity across state lines, according to officials with the Aircraft Owners and Pilots Association.
Repair and maintenance shops are set to see a boost in business, while pilots will see significant savings on costs, including those still seeking ADS-B Out compliance or avionics upgrades, AOPA officials add.
The 6% savings on parts and components will yield a $600 savings on the installation of $10,000 of avionics and about $2,000 savings on a replacement Lycoming IO-540 engine for $34,500.
AOPA and other aviation advocates had been pushing for the legislation for nearly four years. Reducing the cost of aircraft ownership and improving the competitiveness of local aviation industries has long been a top priority for AOPA, and with more than 5,000 members in Maryland, the passage of S.B.121 is also a huge win for the local economy, association officials note.
It wasn’t always smooth sailing for S.B.121. The bill was unanimously passed in the state Senate three years ago before being stalled in the House Ways and Means Committee. But this year, thanks to the leadership of sponsors Sen. Adelaide Eckardt and Delegate Chris Adams, the House of Delegates passed the legislation by a vote of 121 to 11.
Since the March 18 vote, the legislation has endured a lengthy procedural hurdle awaiting Gov. Larry Hogan’s consideration. As a result of the ongoing coronavirus pandemic, Hogan issued a letter on May 7 stating that the bill would automatically become law on May 8 without his signature.
“It took four intensive years and a dedicated team of folks to a make this success happen,” said AOPA Eastern Regional Manager Sean Collins. “It is thanks to the coalition of industry partners from Hagerstown to the Eastern Shore, allies in the state legislature, and the active support of AOPA members that this vision became a reality. The benefits this exemption will provide to the economy through increased demand for maintenance and repair services won’t go unnoticed.”
One should consider the statement regarding the Federal Aviation Act of 1958, regarding states interfering with interstate commerce and the statement, “expected to drive competition, jobs, and aeronautic activity across state lines.” Airports adjacent to state lines where disparity in taxes exist have been a known but ignored problem. Once upon a time, the head attorney for the Indiana Department of Revenue told me when I discussed my above observation with him, “I don’t know about the FAA Act, but it sounds like it does have constitutional ramifications.”
It would be no less than a miracle if aopa could get this to happen in the thief state of Illinois.