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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: January 25, 2013 02:37 PM
From: Senator David G. Argall
To: All Senate members
Subject: Elimination of the Sales and Use Tax on Fixed-Wing Aircraft
In the near future, I will be introducing legislation that would provide an exemption from the state’s Sales and Use Tax for fixed-winged aircraft. It will include exemptions for fixed-wing aircraft parts, maintenance, repairs and sales.

Over the past three years, Pennsylvania has lost the opportunity to be home to at least three fixed-wing airplane manufacturers, costing us hundreds of good-paying jobs.

In October of 2009 Pennsylvania provided a similar sales tax exemption for helicopter sales, parts and maintenance. As a direct result of this change, Sikorsky Aircraft announced that it was moving all commercial helicopter production to Pennsylvania which created an estimated 400 jobs.

A recent study completed by the Independent Fiscal Office (IFO) highlighted the Commonwealth’s distinct competitive disadvantage as compared to other surrounding states. The IFO report states that since 2003, our state recorded a substantial 24.7 percent decline in wholesale-retail employment compared to the rest of the nation, which gained 2 percent in employment. Furthermore, the report finds that the 6 percentage point price reduction is likely to enhance the sales of aircraft, aircraft parts as well as maintenance and repairs on fixed-wing aircraft.

The Aviation Council of Pennsylvania reports that the aviation and aerospace industry has the potential to become one of the top five business clusters in the Commonwealth, creating jobs that pay an average of $50,000 per year.

Our state is in a unique position offering the industry 133 airports, many of which are being underutilized. This exemption will provide the momentum needed to grow this industry within our state and provide good-paying, family-sustaining jobs for Pennsylvanians.

Please contact Jon Hopcraft of my office at 787-2637 or at jhopcraft@pasen.gov with any questions.

Introduced as SB593