Eager to stimulate Florida's aviation industry, Republican lawmakers have filed legislation to eliminate the state's aircraft sales tax. Such a move would put Florida among a handful of states that boast tax-free aircraft sales and, the proposal's sponsors argue, trigger an influx of aviation-related jobs.
- Similar measures failed to gain traction
- Critics say legislation is unfair, favors wealthy buyers
- Supports point to potential jobs created
Similar measures have been introduced in years past but have failed to gain traction amid other tax-cutting priorities. Now, with further big-ticket tax cut proposals limited by a looming budget deficit, aviation industry advocates view aircraft sales tax elimination -- and its relatively minor fiscal impact -- as having more promising prospects during the 2018 legislative session, which begins Tuesday.
Like most states, Florida assesses sales tax on newly-purchased aircraft that are based within its jurisdiction. Eliminating the tax could encourage more out-of-state aircraft buyers to keep their planes in Florida, aiding local businesses like flight schools and maintenance shops.
"Let's eliminate that tax so people register their airplanes in Florida, because they can register them in other states that already have no taxes," said Aircraft Owners and Pilots Association President Mark Baker. "We're not asking them to do that. We're saying, 'just recognize you'll get more aircraft based here, buy more fuel here, by getting rid of this silly tax'."
Critics are deriding the legislation as unfair, arguing that if the aircraft sales tax is to be eliminated, taxes on auto purchases should be, too. They also note that wealthy buyers of multi-million dollar jets would see tax breaks totaling tens of thousands of dollars.
But many planes bought in Florida are far from fanciful. Baker estimates the average value of a propeller-driven piston aircraft is on the order of $30,000.
Those planes are often purchased by flight schools, which could lower their overhead - and the aircraft rental rates they charge student pilots - in a sales tax-free environment.
"Somebody's got to buy them, and the more you have to pay to buy the airplane, including tax, that raises the cost of operating the aircraft, a cost that has to be transferred over to the student learning to fly," said John 'Lites' Leenhouts, who serves as CEO of the Lakeland-based Sun 'n Fun aviation scholarship program.
By contrast, the legislation's supporters are predicting a more affordable flight training regime - along with a ready supply of aviation jobs - should the sales tax be repealed.
"People look at the difference between buying an airplane and paying $14,000, $15,000, $20,000 in tax on it" versus basing in a tax-free state, Leenhouts said.
"They realize there's a cost savings there, they'll buy it, keep it here and they'll pay for maintenance here. More aircraft will be sold here, more aircraft will be worked on here, and there's more jobs associated with that."