John Mininger posted on 10/12/2009 2:37:00 PM
I don't agree Nate.
As I said before, there are not many things that I disagree with the CF on, but this is obviously one.

I believe that business needs to compete for customers. And I also believe that government needs to compete for tax payers. That seems to be exactly what the states surrounding Pennsylvania are doing for aerospace customers; and Pennsylvania is losing.
The question for me becomes simple: Do we forfeit what little aircraft sales and maintenance business we have left in PA to keep tax consistency, or do we compete with the surrounding states who have already exempted aircraft sales and service from sales tax?
It also seems to me that competition dictates what tax consistency should be, In this case the states surrounding PA are creating a consistancy far different then what we have in PA.

Nathan Benefield posted on 10/12/2009 11:06:00 AM
John, I agree that our sales tax rate is harmful to our business climate.

But the idea that an exemption for one specific industry - while keeping the rate high for everyone else - is good public policy is folly.

Rather, the tax should be expanded/exemptions eliminated and the rate should be reduced across the board - this is true both of the sales tax and corporate taxes/tax breaks for the film industry.

John Mininger posted on 10/12/2009 11:01:00 AM
I almost always agree with you Nate. Not this time.
I won’t argue that the sales tax exemption for sales and service of helicopters won’t be beneficial to Tom Houghton, but the fact remains that Pennsylvania is literally getting killed in the aircraft maintenance business by states all around us who have already dropped their sales tax requirement on aircraft maintenance and sales. My only regret is that the legislation didn’t include all aircraft or at least aircraft over a certain size. Unlike owners of ground vehicles, aircraft owners are not very captive consumers.
New York State (New York State!) has, after a 5 year sunset provision, just made their sales tax exemption on aircraft sales and service permanent. In the last 2-3 years Pennsylvania lost at least three major aircraft sales and service centers to NY and MA because we had a 6% sales tax and they didn’t.
This is tax competition in its purist form. Sometimes I think the only person who really gets this concept is Cato’s Dan Mitchell.
John Mininger

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