Excludes from repairs to tangible personal property and fabrication certain preparation and painting of certain aircraft for purposes of sales and use tax aircraft having an FAA registration address outside the state. (7/1/17) (EN NO IMPACT GF RV See Note)
Impact
The introduction of SB93 is expected to have significant implications for contractors and businesses involved in the aviation industry, particularly those that specialize in maintaining military and certified aircraft. By excluding these specific repair activities from sales and use tax, the bill aims to promote business operations in Louisiana by preventing potential tax burdens on companies that may otherwise avoid the state due to tax implications. The bill will also preserve the competitive edge of Louisiana's aviation maintenance firms by ensuring that they can offer services without additional tax liabilities that could be passed onto clients.
Summary
Senate Bill No. 93 aims to amend and clarify provisions related to sales and use tax in Louisiana, specifically regarding the definition and treatment of repairs to tangible personal property. This bill delineates that the preparation, painting, and coating of fixed or rotary wing military aircraft, as well as transport category aircraft with a Federal Aviation Administration (FAA) registration address outside the state, will not be considered taxable repairs under state law. The intent is to provide clear exemptions for specific types of aviation maintenance activities that take place outside Louisiana, thereby simplifying compliance for businesses in the aviation sector.
Sentiment
The sentiment surrounding SB93 appears mostly supportive, particularly amongst legislators and stakeholders in the aviation industry. Supporters argue that the bill enhances Louisiana's attractiveness for aviation maintenance operations and reinforces the state’s position as a hub for military aircraft services. However, there may be concerns regarding the implications of such tax exemptions on state revenue, though the bill notes it has 'no impact on the general fund', which indicates an effort to alleviate any worries about financial deficits resulting from this legislative change.
Contention
While SB93 seems to have garnered positive support due to its potential business advantages, there are underlying tensions related to tax policy and state revenue. The specifics of excluding particular services might lead to discussions on fairness in taxation across other industries not receiving similar benefits. Additionally, the clarity in the bill's language concerning tax exemptions is crucial to avoid loopholes that could affect revenue generation for the state. Thus, while the legislation promotes economic development in the aviation sector, it may also generate debate on equitable taxation practices within Louisiana.
Excludes certain repairs on tangible personal property from local sales and use tax by certain taxing authorities in Calcasieu Parish (EN SEE FISC NOTE LF RV See Note)
Requires that certain repairs to tangible personal property be excluded from state sales and use taxes and sales and use taxes in East Feliciana Parish (EG SEE FISC NOTE LF RV See Note)
Requires that certain repairs to tangible personal property be excluded from local sales and use taxes in East Feliciana Parish (OR SEE FISC NOTE LF RV)
Provides with respect to the levy of state sales and use taxes on certain sales of tangible personal property and services (OR INCREASE GF RV See Note)
Provides for certain tax authorities to grant an exclusion from sales tax for repairs to certain property which is delivered out of state. (7/1/13) (EN SEE FISC NOTE LF RV)