Gov. Susana Martinez, seated, signs House Bill 24 while state officials and company officers look on, Monday, at the AerSale facility in Roswell. The bill provides for a gross receipts tax reduction on the sales of aircraft within New Mexico. (Randal Seyler Photo)
AerSale Inc. at Roswell International Air Center hosted Gov. Susana Martinez Monday as she signed into law legislation that will eliminate sales tax on commercial and military aircraft.
The law will remove the 7 percent gross receipts tax on the sale of commercial and military aircraft and do away with the tax on any maintenance, refurbishing, remodeling or other work done on the planes.
The elimination of sales tax, to take effect July 1, is expected to bring 125 jobs to Roswell and have a direct impact of more than $5 million in the next five years.
“The aviation industry is an integral part of New Mexico’s economy,” Martinez said. “Signing today’s bill is a great start and will ensure that we remain competitive with our neighboring states.”
Martinez spoke well of local legislators, who attended the event, for knowing “exactly what to do.”
“I don’t have to fight the Legislature from Roswell. They’re with me all the way,” Martinez said.
The bill “levels the playing field” for the aviation industry, Martinez said.
AerSale and Stewart Industries are two major companies that operate from RIAC.
“The word is out already,” said John Mulcahy, executive director of the Roswell-Chaves County Economic Development Corporation. “People can bring an aircraft here, have it fixed here and now sell it here, and they don’t have to fly it away. That’s an important factor to be able to do it all here.”
County Commissioner James Duffey said the new law should be a good thing for the county.
“I think it’s great,” Duffey said. “It’s going to create … more jobs here in our community, so hopefully it’s a good thing.”
State Rep. Bob Wooley, R-Dist. 66, ushered the bill through the 30-day session.
“This is a very historic day I think for Roswell,” Wooley said. “The Lord blessed us and everything fell into place. We got it through.”
The state Taxation and Revenue Department reported that there would be minimal loss of any current tax revenue as a result of the passage of the measure, according to its fiscal impact report.
According to industry representatives, airplanes that are maintained and repaired in-state are flown outside of New Mexico for sale to avoid paying the state’s gross receipts tax.
“It’s going to remove the gross receipts tax on the sales of airplanes that have been brought to salvage or to repair and essentially it will help create jobs by increasing the companies’ ability to repair airplanes in the area,” said state Sen. Cliff Pirtle, R-Roswell. “It will be really good for the local economy to help boost Roswell but also help boost the state’s economy as well.”
AerSale Chief Operating Officer Robert Nichols said the new bill gives the state a competitive edge in attracting new business in the highly competitive aviation industry.
Stewart Industries’ Vice President of Operations Dale Mullinax thanked Martinez for her leadership.
“This is the last element it takes to make it an absolutely wonderful place for our customers to come,” Mullinax said. “This could be the one-stop shop. It could be the Wal-Mart of aviation. This only scratches the surface of what’s going to be available in Roswell. Right now, this is going to open a lot of possibilities.”
Martinez visits with members of the Roswell Chamber of Commerce Redcoats at the facility. (Randal Seyler Photo)