Aviation Tax Could Ground Small Business
July 29, 2009
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  • By Gene Mobley

    Wednesday, September 19, 2007

    Across Oregon, small businesses are taking off. Entrepreneurs create, build and sustain companies, providing communities with services, revenue and jobs.

    As they grow and test the boundaries of their communities, many will take off in a different way:by adding a small plane to their business. These aircraft enable small businesses to reach customers and manufacturers efficiently, making them one of the most important tools for a small-business owner.

    I have made my living as a pilot serving small businesses. I am the chief pilot for two companies, American Medical Concepts Inc., a medical device distributor, and Rosen Sunvisor Systems, an aviation products company. Based in Oregon, I fly aircraft across the West Coast, serving Oregon, Washington, Idaho, Alaska and beyond. Without private aircraft, these companies would not be able to serve these regions without enduring hours of delays at airports or days on the road traveling via car.

    This necessary tool for many small businesses is in danger of being taxed out of existence. The Senate Commerce Committee has proposed a risky tax system that would give the big airlines a tax break while substantially increasing taxes on general aviation. This bill has moved into the hands of the Senate Finance Committee, and in the proposal, airplanes could be subjected to a flat tax per flight – meaning that a small turbine aircraft carrying three people would be taxed the same as a jumbo jet carrying 200.

    In addition to this flat tax, the Senate has called for the fuel tax general aviation already pays to more than double: to 49 cents per gallon from 21 cents. While general aviation gets bombarded with these new and increased taxes, the commercial airlines get an annual tax cut of hundreds of millions of dollars.

    Thinking only about their bottom line, the airlines’ plan threatens to eliminate small businesses from the market, many of whom use aircraft to serve Oregon’s rural communities. These businesses often provide an essential connection for citizens to products and services. Because the major airlines ignore these areas, general aviation has been charged with providing these communities with the goods and services they need. Companies such as the ones I serve that rely on airplanes for day-to-day operations would face severe cutbacks because of the proposed cost increase.

    Customers that rely on general aviation will lose services that are essential to their health and well-being. Our mission as a medical device distributor is to provide rural surgeons and patients with vital medical equipment. As costs increase, businesses such as American Medical Concepts will be forced to scale back services for many of our customers. As a result, the customers who depend on us will be deprived of the many essential services to which they have become accustomed.

    Many other essential services around the state also would be affected. Firefighters aiding in forest fires use small aircraft for rescue and relief operations. Small aircraft are utilized for medical care, disaster relief and search-and-rescue efforts throughout the state. Without these aircraft, these services could cease to exist, potentially putting lives at risk.

    Most importantly, these pilots and their airplanes provide Oregon’s small businesses with the means to be competitive locally and beyond. The airlines’ attempt to shirk their own tax burden will come at the direct expense of those small businesses. That is why I urge Sen. Ron Wyden, who sits on the Senate Finance Committee, to stand up against this unfair legislation and protect Oregon’s small businesses and the communities that depend on them.

    Date: 2007-09-19