Florida Aviation Business Association
Serving the General Aviation and Business Aviation Community Since 1946

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.

Amendment to Mechanic’s Lien Law

Prior to 2010, the general protocol was to release an aircraft and if payment was not made within 90 days, a lien was filed/perfected under Chapter 329 (namely s. 329.41 and s. 329.51, as applicable). In 2010, a Florida appeals court ruled that possession of the aircraft is required in order to file/perfect such a lien. This interpretation has been problematic in that a Fixed Base Operator (FBO), fuel supplier, or aircraft service provider is now in bind where they either have to insist on payment prior to releasing an aircraft (which is not good for business – especially for long term credit worthy customers) or release the aircraft (and consequently relinquish their lien rights). It seems that the revisions are rather simple in that the two statutes would need to be changed to specifically state that possession of the aircraft is not required in order to perfect the liens.

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.