LI seeks sales tax break for corporate jets

Long Island officials and aviation companies are lobbying Albany to introduce a sales tax exemption on purchases of corporate jets in a bid to stop jobs and revenue from leaking across state lines.

Long Island MacArthur Airport Commissioner Teresa Rizzuto said the "hypercompetitive" nature of the aviation business, "combined with the ability of these aircraft to be extremely mobile requires New York to compete on a level playing field -- we need that parity."

Sheltair, which provides ground services and hangar space to about a dozen business aircraft at its Northeast headquarters at MacArthur, is one of several companies statewide arguing that New York is losing jobs and revenue because it doesn't give the sales tax break provided by nearby states.

Sheltair and local officials support the New York Aviation Jobs Act, which would repeal the state sales tax on general aviation aircraft and, advocates say, put New York on par with states such as Connecticut, Massachusetts, Rhode Island and Maine. The measure passed in the State Senate on June 23 but awaits action in the Assembly.

"Connecticut's legislative master plan for aviation directly speaks to using the sales tax to poach aircraft, income and jobs from New York-based companies, and they've successfully done it," said William McShane, Sheltair's vice president.

McShane cites Federal Aviation Administration figures that show the number of business aircraft based in Massachusetts and Connecticut, both states with an exemption in place since 2002, grew or suffered relatively slight declines during the past seven years. The number of aircraft based in New York and Pennsylvania, states without the exemption, dropped markedly during the same time period.

It's not just private jets, but "any aircraft used by business in conducting their day-to-day operations -- everything from sightseeing aircraft to those involved in aerial mapping or emergency organ and/or patient transport," McShane said.

Chad Nixon, president of the New York Aviation Management Association, said the situation is urgent. Across Long Island Sound, Connecticut's Waterbury-Oxford Airport recently completed a 63,000-square-foot facility with capacity for 25 business jets. The airport is expanding, he said, with an additional 150,000 square feet under development, and two other Connecticut regional airports are adding hangar space for private aircraft.

Assemb. Donna Lupardo (D-Endwell), who introduced the Assembly bill, agreed the state needs to encourage the aviation industry to grow and prosper here in New York. "Ideally, the Aviation Jobs Act will be part of the governor's proposed budget. If not, we'll work hard so that it's included in the final budget," she said.

A 2010 state transportation department study estimated one corporate jet generates as many as five jobs and $1 million in economic revenue to the region.

At MacArthur, Sheltair and another general aviation company are investing millions of dollars to upgrade facilities in return for long-term leases with the Town of Islip.

Concerned about interstate competition, Islip Town Supervisor Phil Nolan wrote Gov. Andrew M. Cuomo earlier this month asking for his support.

"Based aircraft will improve our economic base, improve sales tax collection on goods and services, and help keep businesses and new investment on Long Island and within the Town of Islip," Nolan wrote.

"It's simple," he said in an interview. "Jets equal jobs and related economic activity."

Aviation's impact in New York State:

Generates $50 billion in annual economic activity or 4.4 percent of the annual gross state product

Almost 400,000 jobs related directly or indirectly

In 2009, more than $4.5 billion in state and local tax revenue was collected from the sector, about 4 percent of all 2009 state and local taxes

SOURCE: State Department of Transportation

Comparison of based aircraft totals between 2002 and 2009 between states with the sale tax and those without

No sales tax

Massachusetts lost 130 based aircraft between 2002-09, a decrease of 4.9 percent of total

Connecticut gained 31 based aircraft, an increase of 2.2 percent

Sales tax

New York lost 698 based aircraft, a decrease of 13.7 percent

Pennsylvania lost 465 aircraft, a decrease of 11.3 percent

SOURCE: Federal Aviation Administration