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Wed Apr 17, 2013, 01:25 PM

PA. House approves state tax cut for buyers of private and corporate jets

"As most Pennsylvania families were paying their taxes Monday, the state House of Representatives voted 172-23 to create a new tax break for the sale and repair of private and corporate jets. This new loophole will drain $10 million to $14 million annually from key priorities, like schools and health care for children.

There is still time to ground the jet loophole. The bill now moves to the state Senate, where we have our work cut out for us. The jet loophole has powerful supporters in Harrisburg, and it is up to us to tell our legislators that it is unaffordable and comes at the expense of bigger priorities for Pennsylvanians."




"The chief argument made by proponents of the legislation—that PA. has lost aviation manufacturing plants—is not borne out by the facts. The recent analysis by the Independent Fiscal Office, “Proposed Sales Tax Exemption, Parts, Use and Sales” released in 2013, makes clear that Pa aircraft manufacturing has done exceedingly well without this exemption. Since 2003, aircraft manufacturing employment grew by 47.7% in PA., compared to 10.8% nationally. In 2011, PA. had 10,382 individuals employed at 50 manufacturing establishments.

Proponents point to three specific cases where Pennsylvania “lost” jobs.... In New Mexico, the plant opened after a bankruptcy and created many fewer jobs than originally promised. In the third case, a Honda Jet plant promised for New York never happened, with Honda expanding its North Carolina facility instead. N. Carolina does not have a sales tax exemption for aircraft.

A final argument that the exemption would create new jobs in airport maintenance, operations and repair fields is, again, not borne out by the facts. The Independent Fiscal Office analysis compared employment growth among states that had recently enacted sales and use tax policy changes with those that did not and found no discernible pattern. In fact, two of the four states that enacted these exemptions, New York and Connecticut, actually lost jobs in aircraft maintenance and repair and airport operations since the exemption was enacted. "

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