NM legislature mulls aviation maintenance tax exemption bill

A bill under consideration in both chambers of the New Mexico legislature would remove a 5.125 percent gross receipts tax on aviation maintenance labor and parts. Maintenance work that could be done in the state is being flown to nearby states with sales tax or gross receipts tax exemptions.

House Bill 14, introduced by Rep. James White with AOPA’s support on Dec. 13, has passed the House Taxation and Revenue and the House Appropriations and Finance committees. It is now awaiting full House consideration. AOPA worked with White last year on similar legislation.

A companion bill, Senate Bill 26 introduced by Sen. Carlos Cisneros, has passed the Senate Corporations and Transportation Committee and is now awaiting consideration by the Senate Finance Committee before heading to the full Senate. The bills have identical language.

All states surrounding New Mexico except for Utah, offer sales or gross receipts tax exemptions for general aviation maintenance, covering labor and parts. “Gross receipts tax exemptions on aircraft maintenance labor and parts increase aviation activity, generate jobs, and raises revenue for businesses in these surrounding states,” said AOPA Central Southwest Regional Manager Yasmina Platt. “New Mexico and Utah are the two states with the lowest number of FAA maintenance shops, FAA-licensed mechanics, and maintenance jobs, in addition to the states with the lowest maintenance economic activity.”

The states surrounding New Mexico—Colorado, Oklahoma, Kansas, Texas, and Arizona—have maintenance gross receipts tax exemptions and attract business from New Mexico and Utah, said Platt. “A gross receipts tax exemption for maintenance would put New Mexico on equal footing with nearby states, thus making New Mexico maintenance shops more competitive,” she said. “The introduction and passage of this important legislation would allow New Mexico’s maintenance and repair shops to better compete in attracting and retaining business, thereby protecting and creating countless family-sustaining jobs in this vital industry.”

Platt will attend an "Aviation Day at the Capitol" event on Feb. 19 at the Santa Fe Capitol. She will explain the importance of general aviation in New Mexico and why legislators should support the passage of both bills. AOPA members should contact their legislators and ask them to support these two bills.