February 17, 2011

OUR OPINION: Tax on private planes hurts tourism industry

What if Maine passed a tax on luxury cars, and let out-of-state owners know that if they visited us for more than a few days, we would treat them like residents' vehicles and assess a 5 percent levy on them?

We could be sure that Cadillac and Lexus owners would be sure to cut their vacations short, or skip their Maine visit altogether. As a tourism-dependent state, such a tax would be considered suicidal.

But that's just what we do with airplanes, even though it produces the same kind of result.

Currently, the owners of new planes, no matter where they live or where they bought them, cannot spend more than 20 days in the state without getting slapped with a bill for 5 percent of the purchase price.

The 20-day limit is one of the quickest triggers on an airplane use tax in the nation, and Maine's posture has led to us being blackballed by fliers from all over.

At a time when schools, pensions and aid to the needy are all on the chopping block, it may seem wrong to cut taxes on people who are rich enough to own their own planes.

Any decision on keeping that revenue in the budget, however, should be balanced against the revenue that could be gained by opening the door to visitors who might want to fly in for extended stays and spend money with a variety of local businesses.

Two bills are heading to the Legislature that seek to address this issue, and both deserve strong consideration. One would amend the tax to make Maine more welcoming, and the other would eliminate the sales tax on parts, making instate airplane maintenance more competitive.

Maine relies on its visitors, and we can't afford to drive them away.

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