Proposed Sales Tax Exemption: Aircraft Sales, Parts and Maintenance and Repair

January 04, 2013 | Economics and Other

The analysis describes Pennsylvania’s tax treatment of aircraft purchases, parts and MRO services and compares the treatment of the aircraft industry in Pennsylvania to other states and regions. The analysis also looks at aircraft industry employment trends in Pennsylvania over the past decade, as well as trends in surrounding states that have implemented policy changes related to the taxation of aircraft (“policy change” states) and states that have not implemented policy changes related to aircraft (control states). Finally, the analysis derives the static revenue impact from an SUT exemption for aircraft and examines the number of job gains necessary to offset the static revenue loss due to the exemption. A technical appendix provides data definitions and historical data on active aircraft registrations across states.

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