Board of Aldermen Page 10
January 10, 2017
aircraft that was $40 million could have a $300,000 first year registration fee in New Hampshire and maybe a
$350.00 registration fee in Massachusetts. Massachusetts has a sales tax but anyone who lives near the
border as we do knows that periodically Massachusetts has sales tax holidays. A number of years ago
Massachusetts declared a permanent sales tax holiday on anything to do with airplanes. If someone were to
buy a $50 million jet they would have a $2.5 million tax bill and that would look a lot worse than a $300,000
registration fee but now that they have voided that sales tax and declared a permanent sales tax holiday in
Massachusetts to compete with us, we are now the high cost competitor with registration fees in the vicinity of
$300,000 for the first year. The registration fee calculation charges fees to all aircraft that are based here and
it's a scale. The scale is dictated largely by what we call millage. Millage is in the first ten years of an aircraft's
life there is a value portion that is charged, that’s why it winds up being $300,000 on an expensive airplane. At
the 11" year that same jet might only be $1,000 to register because it falls off of that first ten year schedule. It
would seem to me that registration fee might have been in lieu of a sales tax, ten years of registration fees to
be still competitive with the sales tax that Massachusetts used to have. Massachusetts has seen growth while
our numbers, as reported to the NH DOT study, are trending down. Again, the value that can come from a
company that bases itself here and happens to rely upon corporate travel to conduct their business could be
great. The property tax associated with it, the jobs associated with it and right now the registration fee is a red
flag, it's a stop sign that says don’t come to New Hampshire. Representative LeBrun put together some
legislation, HB-124, which is going to have a public hearing at the Transportation Committee next week and we
are bringing this now under suspension as an endorsement hopefully for the City of Nashua to support some
kind of registration fee reform and to improve the business climate in New Hampshire and especially in
Nashua. The nearest airport of course is Hanscom and they are getting a lot of our business. We are by the
way, Nashua is the busiest airport in the state and Nashua is trending down. In an effort to have a statement
from the city to present at that committee hearing next week, we brought this in and | would be happy to
answer any questions about it. | am sensitive to the desire for there to be some revenue neutrality to it. The
goal of this legislation is that it is not revenue neutral, the goal is that it is overwhelmingly revenue positive and
that’s what drawing new businesses here could do for the state. There are some fee issues and maybe we
can have the state committee take a look at some of the options for restoring some of that revenue lost in the
short-term.
President McCarthy
Alderman Schoneman, do you remember off hand what the total number of aircrafts are registered in the state
is?
Alderman Schoneman
| don’t know but 1,100 sounds familiar to me.
President McCarthy
If | recall correctly, the total revenue from the registration fees statewide is about $850,000?
Alderman Schoneman
Yes, approximately.
President McCarthy
Which works out to about $8,000 per aircraft which means there aren’t very many that are paying $300,000
registering the state, is that correct?
Alderman Schoneman
That is correct. Where Massachusetts may 50 large jets we might have 3 or 4 of the same type. | spoke with
a chief pilot who is based down in Hanscom. He was the chief pilot for EMC which was bought by Dell and
