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Aviation tax changes making Indiana skies friendlier

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A change in state law could make Indiana a friendlier stop for corporate pilots who've long avoided stopping for fuel here because of high taxes.

Indiana began exempting aviation fuel and maintenance and service work on planes from its 7-percent state sales tax effective Monday. It has substituted a flat 10 cents-per-gallon excise tax for fuel purchases.

Tom McCord, sales manager at Tom Wood Aviation, which operates Metropolitan Airport in Fishers, said the changes could save pilots hundreds of dollars and bring in business for the 68 airplane maintenance shops around the state.

"I think we are going to see an increase in aviation activity across the board," he told The Indianapolis Star.

The tax cut, approved by the General Assembly this spring after intense lobbying by the aviation industry, comes as general aviation businesses continue to struggle since the recession crimped the budgets of many companies using planes for business and people flying for pleasure.

McCord said the tax change "is going to give us a competitive advantage" in fuel sales while cutting the costs of fixing and maintaining planes and operating planes for flight schools.

Bart Giesler, executive director of Aviation Association of Indiana, agreed, noting that Indiana airplane maintenance and service shops had been competing for work with some neighboring states that eliminated their sales tax on airplane work years ago.

Indiana repair shops "knew they were at a 7-percent disadvantage before they even started," Giesler said. "Now the playing field is leveled."

Mark Kimberling, national director of state government affairs for the Aircraft Owners and Pilots Association, said Indiana's changes could bring it an aviation boom similar to one Maine experienced after it granted its aviation businesses sales and use-tax relief in 2011. Eleven of 12 aviation service providers surveyed by the state said business increased, and six said they added employees and expanded facilities.

Though tax revenue from fuel sales goes into Indiana's general fund, it's hard to estimate how much the state could reap from the changes. Aviation fuel sales aren't tracked.

Airplane owners say they welcome the tax relief.

"It's great. Our customers are thrilled they are not going to have to pay sales taxes," said Andrea Montgomery, co-owner of Montgomery Aviation, which runs airports in Zionsville, Frankfort and Peru.

"We were losing a lot of business" to out-of-state airports, Montgomery said. "Now I can advertise that we are (selling aviation fuel for) much less than the national average."

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  • Really??!!
    How does this benefit the state? Indiana is not the mecca of aircraft repair, so how can anyone justify this as anything but a sweetheart subsidy?

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  1. Why not take some time to do some research before traveling to that Indiana town or city, and find the ones that are no smoking either inside, or have a patio? People like yourself are just being selfish, and unnecessarily trying to take away all indoor venues that smokers can enjoy themselves at. Last time I checked, it is still a free country, and businesses do respond to market pressure and will ban smoking, if there's enough demand by customers for it(i.e. Linebacker Lounge in South Bend, and Rack and Helen's in New Haven, IN, outside of Fort Wayne). Indiana law already unnecessarily forced restaurants with a bar area to be no smoking, so why not support those restaurants that were forced to ban smoking against their will? Also, I'm always surprised at the number of bars that chose to ban smoking on their own, in non-ban parts of Indiana I'll sometimes travel into. Whiting, IN(just southeast of Chicago) has at least a few bars that went no smoking on their own accord, and despite no selfish government ban forcing those bars to make that move against their will! I'd much rather have a balance of both smoking and non-smoking bars, rather than a complete bar smoking ban that'll only force more bars to close their doors. And besides IMO, there are much worser things to worry about, than cigarette smoke inside a bar. If you feel a bar is too smoky, then simply walk out and take your business to a different bar!

  2. As other states are realizing the harm in jailing offenders of marijuana...Indiana steps backwards into the script of Reefer Madness. Well...you guys voted for your Gov...up to you to vote him out. Signed, Citizen of Florida...the next state to have medical marijuana.

  3. It's empowering for this niche community to know that they have an advocate on their side in case things go awry. http://www.youtube.com/watch?v=Lrst9VXVKfE

  4. Apparently the settlement over Angie's List "bundling" charges hasn't stopped the practice! My membership is up for renewal, and I'm on my third email trying to get a "basic" membership rather than the "bundled" version they're trying to charge me for. Frustrating!!

  5. Well....as a vendor to both of these builders I guess I have the right to comment. Davis closed his doors with integrity.He paid me every penny he owed me. Estridge,STILL owes me thousands and thousands of dollars. The last few years of my life have been spent working 2 jobs, paying off the suppliers I used to work on Estridge jobs and just struggling to survive. Shame on you Paul...and shame on you IBJ! Maybe you should have contacted the hundreds of vendors that Paul stiffed. I'm sure your "rises from the ashes" spin on reporting would have contained true stories of real people who have struggled to find work and pay of their debts (something that Paul didn't even attempt to do).

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