Rhode Island Rolls Back Aviation Taxes

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Airplanes and most of what keeps them flying will soon be less costly in Rhode Island after the state apparently thought better of its sometimes-confusing attempts to make aviation pay. Gov. Donald L. Carcieri signed legislation on Monday that will repeal laws that taxed aircraft sales and associated services. Although the taxes were never popular, they became even more of an issue last year when the state invoked a "user tax" that slapped seven percent on the cost of an airplane and associated services even if they were purchased out of state. It also could be applied to non-resident companies. The taxes will be repealed effective Jan. 1, 2005. The new law specifically exempts from tax "the sale, storage, use or other consumption of new or used aircraft and aircraft parts" according to the National Business Aviation Association (NBAA). NBAA was part of a coalition of aviation groups that lobbied the Rhode Island government for a year to get rid of the taxes. The lobbying undoubtedly helped but it's also likely that the tax-free services available in nearby Connecticut and Massachusetts had put a damper on aviation related businesses in Rhode Island. "Rhode Island will now be on par with its neighboring states providing equitable tax treatment of aircraft," said NBAA spokesman Mike Nichols. "We expect this will translate into additional jobs for residents of Rhode Island."