The New York State Legislature recently passed significant tax reform which brings the Empire State’s aviation tax requirements in line with neighboring jurisdictions. Through its budget process, the State legislature exempted general aviation aircraft from its sales and use tax. The measure is aimed at attracting aviation-related jobs and business to New York, which has long been devoid of such economic resources. The State legislature also removed onerous requirements on leasing structures used by aircraft owners and other businesses.
Once signed by the governor, the reforms will exempt general aviation aircraft, machinery and equipment installed on such aircraft from New York sales and use tax, beginning on Sept. 1, 2015. The exact level of impact on the State’s economy and aircraft owners, as well as the legal implications for aircraft transactions remain to be seen.
Due to the complexity of aircraft transactions, potential buyers and sellers should consult with experienced legal counsel as early as possible in the deal process.