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March 15, 2020

FABA March 2020 Legislative News

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Sales Tax Exemption on Aircraft Sales

FABA is encouraging the Florida legislature to follow the lead of other States such as New York and offer an exemption to sales tax on aircraft. In essence, Florida is losing a great deal of aviation business and opportunity to other states. For example, other states such as New York have little or no sales tax on aircraft. Numerous transactions are closed in other states where the aircraft are simply flown out of Florida for the closing. Moreover, any work done on these aircraft is performed in other states to the detriment of aviation businesses in Florida.

Amendments to Mechanic’s Lien Law

In 2019 FABA successfully championed amendments to Florida Statutes s. 329.41 and s. 329.51 to clarify that that liens claimed under Florida law for labor, services, fuel, or material furnished to an aircraft are not possessory liens and thus, a person claiming such a lien does not need to keep the aircraft in his or her possession to enforce the lien. The law now allows a lienor to enforce a lien for fuel, labor, services, or material furnished to an aircraft even if the lienor releases the aircraft to the owner or operator. This will make it easier for a lienor to recover money owed for maintenance on an aircraft without keeping a commercial aircraft out of service and potentially disrupting commercial air travel. This will also allow the owner or operator of an aircraft on which a lien is claimed to keep using the aircraft while he or she works to satisfy the lien.

Current Status:

We are still working the aircraft sales tax repeal to be a part of the House and Senate tax packages and for the lien law amendment to be attached to a bill. Rep. Miller and Sen. Bean are encouraging their respective committee chairs to include the repeal. We are waiting on the Senate tax package to be released at this point to know whether the issue is still alive. The House did not include the aircraft sales tax exemption in its tax package and ultimately collapsed its tax package from $331 million to less than $80 million due to Parkland. Rumor has it that the Senate tax package will be smaller than the House and that the Senate is more interested in a reduction in the aviation fuel tax for the airlines, but will not know for sure until documents are released.