The economic impact of repealing the seven percent aircraft maintenance labor and parts tax in Mississippi
Many aircraft owners in the general aviation industry do not possess maintenance and facility technicians of their own. They shop around to get the lowest possible price to maintain their aircraft. Mississippi has taxes on both labor and parts for aircraft maintenance at the rate of seven percent. The state government repealed these taxes in 2006, a question posted by local decision makers might be: what the economy would likely be after tax repeal? In response to this question, the study first developed an econometric model to estimate aircraft ownership. Then, the Impact Analysis for Planning model (IMPLAN model) was used to estimate the effect of repealing the aircraft maintenance labor and parts tax in Mississippi. The results showed the state output, employment, and labor income would increase substantially if the labor and parts taxes were repealed.