Make New York's skies friendlier for business
A Gulfstream IV private jet rolls past the control tower on take-off at Republic Airport in East Farmingdale (Aug. 7, 2011) Credit: Kevin P. Coughlin
As long as Gov. Andrew M. Cuomo is looking at steps that could make our tax system more rational and create jobs, he should end the sales tax on private planes. The state has already exempted maintenance of these planes from the tax. It's time for the next step.
The current tax discourages companies that own general aviation aircraft from basing them here. They can just as easily keep them in Connecticut, for example, where there's no sales tax on them, and fly them into New York as needed. So Connecticut gets the benefit of having the planes -- from the jobs of those who maintain them there to the sales tax on fuel, and other economic activity.
Here's how the sales-and- use tax works: If you buy the plane in New York, you pay the tax based on the sale price. If you buy it elsewhere and later move it here permanently, you pay the tax based on its market value at the time you move it here.
Estimates of the state's annual take from the tax range from about $3 million to $15 million. That's small potatoes. Realizing that, the State Senate passed a bill in June to exempt private plane sales from the tax. But it's mired in the Assembly.
The bill's backers say that, after the recession, firms with a lot of cash are likely to buy planes. Without this tax, more aircraft, and the dollars they generate, will make their home in our state. We want them on the Island, the Cradle of Aviation, at such airports as Republic or MacArthur -- not in the Nutmeg State.
