South Carolina Governor Nikki Haley has signed a bill into law removing the state’s 7-percent sales tax from parts for aircraft operated under Part 91. The change is expected to make South Carolina’s aviation maintenance and repair operations (MROs) more competitive with MROs in tax-exempt states.

“Because aircraft are mobile, owners can easily shop around to different states in search of the best deal for maintenance and repair. Removing the Part 91 tax levels the playing field so that South Carolina’s aviation companies can compete with companies in tax-exempt states such as Georgia, Tennessee and Florida,” said Steve Townes, chairman of the aerospace industry cluster at the South Carolina Council on Competitiveness. The exemption also becomes a selling point for economic developers to recruit aviation businesses to the state.

Owner-operated aircraft were the only type of aircraft subject to Part 91 tax. Commercially owned aircraft and courier service aircraft were already exempt under state law. Supporters of the exemption say its positive impact will carry over into non-aviation businesses.

“The state was collecting only about $500,000 in Part 91 tax revenue, and we know of at least two opportunities totaling $1.8 million that South Carolina lost because of the tax,” said Don Purcell, president of the South Carolina Aviation Association. “Removing the tax means more business revenue in the state and, ultimately, more capital investment and jobs.”

Source: AINalerts News