Indiana Slashes Aviation Taxes


While other governments, including the current administration, are increasingly viewing aviation as a cash cow, the State of Indiana has slashed aviation-related taxes that will save some aircraft operators thousands of dollars a year. The legislature in Indianapolis has cut fuel taxes from 60 cents a gallon (based on current prices) to a 10-cent-a-gallon excise tax. Taxes on parts used in repairs and maintenance have also been eliminated. AOPA says the outcome came after a lobbying effort it supported involving the local aviation community. The group showed Indiana lawmakers how Maine had significantly improved its aviation industry by amending its aviation tax structure a few years ago.

The savings will be considerable for both itinerant and transient traffic in Indiana. For instance, the owner of a Baron will save more than $100 on a single fill-up under the new tax structure. Busy flight schools could save as much as $40,000 per airplane every year. The reductions put Indiana back in a competitive position with neighboring states that have lower aviation-related taxes. “Indiana had to respond, as other states have seized on their neighbors’ tax structures to gain competitive advantages for their aviation businesses,” AOPA Great Lakes Regional Manager Bryan Budds told AOPA Online. “Excellent Indiana repair shops have been unable to compete by attracting out-of-state aircraft for services, and have seen the troubling trend of based aircraft leaving the state to save money.”