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August 06, 2015

New York Sales and Use Tax Exemption for GA Aircraft

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The Department of Taxation in New York has recently issued guidance on the new GA sales tax exemption.  Please review the related article below issued by NBAA.

As part of the 2015 budget process, the New York state Senate and Assembly passed a measure that exempts all general aviation aircraft transactions from the state's sales and use tax. The exemption was signed into law by Gov. Andrew Cuomo, and will take effect on Sept. 1.

The budget agreement exempts sales of general aviation aircraft, and machinery or equipment installed on those aircraft, from state and local sales/use tax formerly assessed at up to 8.75 percent of the purchase price of an aircraft. The measure defines a general aviation aircraft as any aircraft used in civil aviation that is not a commercial aircraft, military aircraft or unmanned vehicle/drone.

The definition of commercial aircraft was not changed as part of this measure and includes an aircraft used primarily to transport persons or property for hire (see Section 1101(b)(17) of New York tax law).

With the passage of the budget, the New York State Department of Taxation and Finance created a sales tax memo (TSB-M) to provide more details on implementation of the new exemption. At NBAA's request, specific examples dealing with how the exemption applies to leasing structures and aircraft purchased before the exemption takes effect are included in the memo. 

Final Budget Provision - The general aviation exemption provision is contained in New York Assembly Bill 3009, which includes a number of financial and administrative provisions needed to implement the state budget. Part TT of the bill adds the exemption and makes other statutory changes needed to implement the exemption.

The exemption reads as follows:

Section 3. Subdivision (a) of section 1115 of the tax law is amended by adding a new paragraph 21-a to read as follows:

(21-a) General aviation aircraft, and machinery or equipment to be installed on such aircraft. For purposes of this subdivision, "general aviation aircraft" means an aircraft that is used in civil aviation, that is not a commercial aircraft as defined in paragraph seventeen of subdivision (b) of section eleven hundred one of this article, military aircraft, unmanned aerial vehicle or drone.

Section 4. This act shall take effect September 1, 2015, and shall apply in accordance with applicable transitional provisions of sections 1106 and 1217 of the tax law.

Review Part TT of Assembly Bill 3009

Business Aviation in New York

Business and general aviation provide the following economic benefits to New York, which will increase as a result of this exemption:
•Across New York state, aviation supports more than 394,500 jobs with a total payroll of more than $18 billion.
•According to the New York Department of Transportation, the economic impact of general aviation airports is $1.06 billion.

•There are 90 public-use airports that are used by 17,449 pilots and 6,457 general aviation aircraft.
•New York state also produced a report on the benefits of aviation, review the report.

More Information