Operators of Bombardier jets are dismayed because they now have to pay state sales taxes on parts purchased through Bombardier’s Smart Parts program. Several operators who spoke to AIN on condition of anonymity said one of the primary reasons they participate in Smart Parts is to control and budget annual operating costs. “This adds a new dimension to overhead we didn’t budget for 2010,” one said.
Although some operators expressed concern because Bombardier has begun charging sales tax for parts covered under its Smart Parts program, this is a fairly normal requirement, according to tax expert Nel Stubbs, vice president of Conklin & de Decker.
The Ohio General Assembly has included an amendment to a recently enacted sales and use tax exemption for aircraft maintenance and repair transactions done at an FAA Part 145 repair station.
Conklin & de Decker last month released the 2008 State Tax Guide for General Aviation. The guide contains the latest taxes and fees for all 50 states, as well as sales and use tax applicable to aircraft sales, ownership, lease, parts and labor.
As of July 1, the state of Indiana can no longer impose a use tax on the value of aircraft temporarily located in the state for refurbishment, maintenance and overhauls.
California has amended its aircraft sales and use tax law, essentially closing a loophole that allowed buyers of aircraft and other big-ticket items to escape paying sales taxes.
The New York State Assembly didn’t follow the Senate’s lead and pass legislation that would exempt Part 91 aircraft from sales and use taxes. The bill’s sponsors said they intend to reintroduce the measure early this year. “This bill would make New York competitive with other [nearby] states that already exempt sales taxes related to aviation activities,” Sen. Bill Larkin (R-39th District) said.
New York’s state Senate last week passed legislation (S.3655) sponsored by Sen. Bill Larkin (R-39th District) to provide a sales and use tax exemption on general aviation airplanes to be operated under Part 91 and purchased in the state. The exemption, if passed by the state Assembly and signed by the governor, would take effect on December 1.
A letter from the Internal Revenue Service (IRS) can cause any taxpayer’s heart to skip a beat. For aircraft operators, whose main focus of government compliance is the FAA, it can be easy to overlook the many nuances of the federal and state tax codes to ensure all taxes are being paid.
New York’s state Senate passed legislation (S.3655) sponsored by Sen. Bill Larkin (R-Croton-on-Hudson) to provide a sales and use tax exemption on general aviation airplanes to be operated under Part 91 and purchased in the state. The exemption, if passed by the state’s Assembly and signed by the governor, would go into effect on December 1.