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Indiana Legislation Cuts Costs for Aircraft Owners in Effort to Revive Aviation Industry

Due to lobbying efforts initiated by the Aircraft Owners and Pilots Association (AOPA), Indiana recently enacted new legislation that will save aircraft owners thousands of dollars per year in aviation-related taxes. The legislation is aimed at reviving Indiana’s aircraft industry in order to enhance the state’s competitiveness.

Based on current Avgas prices, the fuel tax will be cut from 60 cents per gallon to 10 cents per gallon, resulting in hundreds of dollars in direct cost savings on aviation fuel tax per fill-up. The new legislation also implements new sales tax exemptions for aircraft repair parts and maintenance, further reducing costs associated with aircraft ownership in Indiana. The Hoosier state saw these tax cuts go into effect on May 13.

This new aviation legislation was enacted to boost Indiana’s competitive position in the aviation industry and was aimed at increasing jobs and revenues within the state. Decreased repair and maintenance costs will likely allow Indiana repair shops to attract more out-of-state customers. AOPA pointed to similar measures implemented by Maine to improve its aviation industry as a model of the legislative reform efforts necessary in Indiana.

Not only will the new aviation laws reduce burdens for aircraft owners, but they are a crucial step in leapfrogging the state of Indiana from one of the worst in the nation for aviation taxes to among the best. AOPA will continue its lobby efforts with local legislators to identify other tax policies beneficial to the industry, the most significant being a restructuring of the tax system to allow a portion of the collected aviation taxes to be reinvested into Indiana’s aviation infrastructure.

If you have questions about how this recent legislation may affect you or your business, please contact a member of the Tax and Finance Practice Group at Bingham Greenebaum Doll LLP.

DISCLOSURE REQUIRED BY CIRCULAR 230. This Disclosure may be required by Circular 230 issued by the Department of Treasury and the Internal Revenue Service. If this article, including any attachments, contains any federal tax advice, such advice is not intended or written by the practitioner to be used, and it may not be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer. Furthermore, any federal tax advice herein (including any attachment hereto) may not be used or referred to in promoting, marketing or recommending a transaction or arrangement to another party. Further information concerning this disclosure, and the reasons for such disclosure, may be obtained upon request from the author of this article. Thank you.

  • Partner

    As a Partner and Chair of the Firm’s Tax and Employee Benefits Department, Mark’s practice focuses on resolving clients’ state, local and federal tax issues through planning, audit management, administrative protest ...

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