State Tax Changes in 2016 BY NEL STUBBS E very year, the states make changes to their tax laws and many of these tax changes af- fect general aviation aircraft. Staying on top of these changes can be very challenging. What follows are some of the changes effective in 2016. ARIZONA – Retroactive to 1985, Agricultural Aircraft are exempt from the state’s Transaction Privilege & Use Tax. Effective June 30, 2016, how- ever retroactive to June 1, 1998 for refunds. Aircraft operated greater than 50% under FAR Part 135 are exempt from the state’s Transaction Privilege & Use Tax. COLORADO – Retroactive to July 1, 2014, aircraft removed within 30 days of the completion of maintenance, interior refurbish- ment, paint or engine work associ- ated with the sale of the aircraft will be exempt from the tax. FLORIDA – Effective July 1, 2016, the fuel tax on Jet Fuel and Aviation Gasoline decreased from 6.9 cents per gallon to 4.7 cents per gallon. IDAHO – Effective February 19, 2016, the sunset provision on the sales tax exemption for aircraft parts on out-of-state aircraft was removed. LOUISIANA – Effective April 1, 2016, the state sales/use tax rate increased from four to five percent. NORTH CAROLINA – Effective January 1, 2016, sales of aviation gasoline and jet fuel to interstate air businesses for use in commercial aircraft are exempt from sales tax. This exemption expires in 2020. Effective October 1, 2016, ser- vice contracts on a “qualified air- craft” (those with a maximum takeoff weight of between 9,000 and 15,000 pounds) and quali- fied jet engines are exempt from the sales tax. In addition, parts and accessories used in the repair and maintenance of “qualified aircraft” are exempt from the sales tax. OREGON – Effective January 1, 2016, Jet Fuel and Aviation Gasoline Tax both increased by two cents. The increase will expire on 1/1/2022. SOUTH CAROLINA – Effective January 1, 2016, parts and sup- plies used by persons engaged in the business of repairing and re- conditioning aircraft are exempt from tax. This exemption does not extend to tools and other equip- ment not attached to, or that do not become a part of, the aircraft. Effective FY 2016-2017, a portion of the personal property tax col- lected from aircraft owners will be directed to the State Aviation Fund. SOUTH DAKOTA – Effective April 1, 2016, the state sales/use tax will increase from four to four and a half percent; however, this will not affect the Aircraft Excise Tax which will remain at four percent. TENNESSEE – Effective January 1, 2016, the time al- lowed to remove an aircraft from the state by a non-resident is in- creased from 15 days to 30 days. UTAH – Effective May 10, 2016, HB24 provided clarifica- tion of the use of monies in the Aeronautics Restricted Account for aerial search and rescue. WASHINGTON – Effective July 1, 2016, the penalty for registrations that are more than 60 days past due is limited to $100 and the penalty revenue is diverted into an account aimed at improving airports. For more information regarding the above or to discuss legisla- tion in any other states, call Nel Stubbs at 928-443-8676 or email her at [email protected]. 94 Aviation Business Journal | 3rd Quarter 2016
