AIRCRAFT PARTS TAX EXEMPTION                                                       H.B. 6549 & 6550:

                                                                                                    SUMMARY OF BILL

                                                                                      REPORTED FROM COMMITTEE

 

 

 

 

 

 

 

 

 

House Bills 6549 and 6550 (as reported by the Committee of the Whole)

Sponsor:  Representative Bronna Kahle

House Committee:  Tax Policy

Senate Committee:  Committee of the Whole

 


CONTENT

 

House Bills 6549 and 6550 would amend the General Sales Tax Act and the Use Tax Act, respectively, to exempt from taxation the sale of parts and materials, except shop equipment or fuel, affixed or to be affixed to an aircraft. The bills would delete current language exempting the sale of parts and materials affixed to an aircraft that is owned or used by a domestic air carrier or affixed to an aircraft that leaves the State and is not based or registered in Michigan.

 

House Bill 6550 also would add a use tax exemption for the use of an aircraft by a domestic air carrier if the aircraft met certain criteria (as provided for the sale of an aircraft to a domestic air carrier under the General Sales Tax Act).

 

MCL 205.54x (H.B. 6549)                                          Legislative Analyst:  Drew Krogulecki

       205.94k (H.B. 6550)

 

FISCAL IMPACT

 

The bills would reduce sales and use tax revenue by approximately $4.0 million per year, based on estimates from the Michigan Department of Treasury. How the impact would be split between sales tax revenue and use tax revenue is unknown. Approximately 73.3% of sales tax revenue is directed to the School Aid Fund, while constitutional revenue sharing to local units receives 10%, and the remainder is directed to the General Fund. Use tax revenue is split with one-third directed to the School Aid Fund, and two-thirds directed to the General Fund.

 

Date Completed:  12-18-18                                                       Fiscal Analyst:  David Zin

 

 

 

 

This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.