Feb. 14—The Kentucky House is preparing to hear a bill that would exempt personal aircraft from state and local property taxes.
House Republican majority leaders last week assigned House Bill 447 to the House Transportation Committee. The bill would award the tax break to private jets, airplanes and helicopters that are not used for commercial passenger purposes. Currently, such aircraft owners pay taxes of 1.5 cents each year for every $100 of assessed value.
The Kentucky Revenue Department reports 770 individual tax returns including personal aircraft in the most recent year, raising about $50,000 for the state treasury and about $2.5 million for schools, cities, counties and other local taxing entities.
The bill's lead sponsor, Rep. Jonathan Dixon, R- Corydon, said Monday that his proposal "is aimed at making our commonwealth more competitive in attracting the smaller single- and double-engine aircraft that drive business at our general aviation airports."
"This isn't about giving someone a tax break, it is about using our resources to create jobs," Dixon said.
"The proposal would create opportunities for pilots, maintenance techs, line workers and airport staff, as well as an increased need for hanger space and rental. We're also encouraged by the potential for indirect economic impact in the form of site business growth, construction jobs and educational opportunities," Dixon said.
Dixon's proposal is creating unease among some lawmakers since it comes just days after the House voted to cut unemployment insurance payments for Kentuckians who have lost their jobs.
"To me, the juxtaposition is terrible," said Rep. Tina Bojanowski, D- Louisville.
"We're kicking people when they're already down, we're reducing support for them while they're looking for work, and then we turn right around and give rich people a break on their taxes? That's infuriating," Bojanowski said. "As far as I'm concerned, you've got to be pretty wealthy to own your own personal airplane."
Rep. John Blanton, a Republican who represents Knott, Magoffin and Pike counties, unsuccessfully tried last week to block parts of the bill that would reduce jobless benefits for unemployed Kentuckians.
On Monday, Blanton said the proposed tax break for private aircraft owners puzzles him.
"I guess I don't move in the same social circles as people who fly their own airplanes, but I just don't see the benefits for us as a state in doing this," Blanton said. "I don't see the need for it. I don't know what it gains us."
Twenty states, including Kentucky and several of its border states, levy a property tax on personal aircraft, according to the Aircraft Owners and Pilots Association in Frederick, Md.
A recent operational plan released by the Kentucky Department of Aviation recommended a long list of ideas to promote the state's general aviation airports, used by smaller private aircraft. Among the ideas were eliminating the property tax on personal aircraft, "to encourage relocation of Kentucky-owned aircraft from surrounding states," and removing the sales tax from aircraft parts and services.
"It was listed as one of the priorities of the Kentucky Department of Aviation and has the support of the local leadership at many of the general aviation airports," Dixon said Monday.
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