posted on July 03, 2013 13:30
Flight schools in New York are scrambling. Recently, the state taxation and finance department has started auditing owners of private airplanes who lease their property to flight school students looking for tax payments that were once exempt.
“The state says we as the flight school have to pay sales tax and we can’t collect it because the students that we’re training are exempt," Bob Miller, owner of his eponymous flight school. "It’s a bizarre situation. For us, it adds 8.5 percent to the flight hour which is already enormously expensive.”
Bob Miller Flight School had to close its location in Lancaster a few months ago and now its Batavia location must be shut down for this reason: the state, he says, is demanding owners of these private planes to pay sales tax up to five years.
Miller says this is not a new law, but a new interpretation that puts flight schools in an impossible situation.
“(The owners of the private planes) purchased the airplane for the express purpose if leasing it to flight schools, which for decades was an allowable purchase without paying sales tax because the aircraft was being used in a flight school," Miller said. "So the owners have now taken the aircraft away. We have no airplanes.”
Miller says he’s now trying to cut his contract with the Genesee CountyAirport short because he’s going out of business. The county would lose about $2,700 a year in revenue with the flight school closed.