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Aviation Sales Tax

As the House debates raising taxes, I am writing on behalf of the members of the Aviation Caucus and the House of Representatives who represent airports, aviation-related businesses, or people who work in aviation or the aviation-related industry in our districts.

Thank you for this opportunity to share with you our concerns over the inclusion of a provision to eliminate the sales tax exemption on aircraft sales and parts in the House tax package currently under consideration.

As you may know, this exemption is relatively recent and has just begun to bear fruit. I represent Westfield Barnes Municipal Airport which has started to thrive since the sales tax was exempted in 2001.

It is my understanding that the Massachusetts Aeronautics Commission reports annually to the Joint Ways and Means Committees about how much money the state "loses" due to the exemption versus how much it gains in ancillary revenue.

That revenue includes the property taxes paid by the aviation-related businesses, the income taxes paid by the well-paid, highly skilled workers and technicians, the sales tax on the food sold by the caterers, the taxes paid by the rental car companies that service the clients of flying-related businesses, the fuel taxes paid by pilots, and more.

Repealing this exemption would capture very little revenue initially, but would kill general aviation-related businesses in the Commonwealth. Any money realized would come only in the first year, as word would quickly spread among the small and tight-knit group of people in the aviation world.

After that, business would dry up instantly as pilots, airplane owners, and companies moved out of the Bay State and crossed the borders into neighboring states that are not so punitive to the aviation community.

All contiguous states to ours have a sales tax exemption on aircraft sales and parts on their books. Massachusetts also has the highest excise tax on aircraft fuel per gallon.

If the Legislature repeals the sales tax exemption Massachusetts will immediately become more costly and less competitive than all of our neighboring states. Who could blame the companies with planes based at my airport in Westfield for immediately relocating to Connecticut or Rhode Island or Vermont? With every plane goes between four and 10 highly-skilled, good paying jobs and the revenue from those income taxes and sales taxes.

A small state like Massachusetts is simple to bypass when you're flying. It takes little time and fuel to fly over or around the Commonwealth and set up your aviation-related business in a bordering state.

There are 39 public-use airports in Massachusetts. Everybody knows about Logan, but there are airports in Worcester, Plymouth, Hyannis, Nantucket, Pittsfield, Westfield, Chicopee, Norwood, Pepperell, North Adams, New Bedford, and more. Many of the airports in our state are public but there are some that are privately owned and used by the public.

Surrounding every one of those airports are many businesses, large and small, that rely on those airports and provide a multitude of goods and services, as well as benefits both tangible and intangible.

The Legislature and the Governor should be justifiably proud of the incentives we passed for the film industry that encouraged Hollywood movie makers to come to Massachusetts to shoot and produce films here, rather than in competing states. Those incentives have paid large financial dividends.

Airports play an important role in the transportation infrastructure of Massachusetts. They make our state more attractive to the business community. They are economic engines for our Commonwealth. Removing the fledgling incentive of the sales tax exemption on sales and parts will have an unintended consequence of killing the industry and drying up those financial dividends.

Thank you, most sincerely,

Donald F. Humason Jr.

Westfield's State Representative

Co-chair, Aviation Caucus