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RALEIGH — Greensboro-area legislators have filed bills that would exempt from sales tax some equipment used by airport-related businesses.

The most pressing measure, said Rep. Maggie Jeffus, a Guilford County Democrat, is one that would lift sales taxes on aircraft simulators.

State law exempts simulators used for training “flight crews” but the change would broaden the language to include all flight simulators. Jeffus said the proposed tax break is linked to a company the state is trying to recruit to North Carolina.

“One of the No. 1 priorities is bringing jobs into North Carolina and into this area,” Jeffus said. She said fiscal researchers had not completed their study of how much the tax breaks might cost.

Don Vaughan, who sponsored the Senate version of the legislation, said the request for the bill came through the Greensboro Partnership, a business umbrella group that, among other things, works on job recruitment.

Jason Cannon, vice president for government affairs at the partnership, confirmed that the simulator tax break was part of an effort to recruit a specific company and “a number of jobs” to the area.

As described by Cannon and legislators, the recruitment effort is part of a long-term plan to create a cluster of air-transportation businesses at Piedmont Triad International Airport. Companies such as aircraft manufacturer HondaJet and shipper FedEx are part of that overall plan.

The simulators, Cannon said, would cost about $10 million a piece, and jobs linked to their purchase would pay between $30,000 and $90,000.

Cannon and legislators knowledgeable about the bills said they were urgent because Georgia was competing for the same company and its legislature has been poised to pass a similar tax break.

Greensboro had been working in recent months to land an undisclosed aviation project that could bring up to 800 jobs. But city officials recently said that project is on hold because of the recession, and it’s unclear if this tax break is related to that effort.

“The hope is that in the long run the training company could integrate with HondaJet and other business surrounding the airport,” Cannon said.

HondaJet already plans to install a flight simulator at their airport location. And officials with HondaJet and FlightSafety International, the company that will provide HondaJet’s simulator, said they did not know anything about the pending law.

A separate part of the simulator bill would exempt from sales tax “materials handling equipment, racking systems, and related parts and accessories for the storage or handling and movement of tangible personal property at an airport or in a warehouse or distribution facility.”

Cannon and Jeffus both said that part of the bill was aimed at a separate company.

The chances for either tax break passing are mixed. North Carolina faces a budget gap that could reach well over $3 billion as legislators try to craft the spending plan that takes effect July 1. However, both legislative leaders and the governor said measures related to job recruitment will be given a high priority.

Neither measure was included in Gov. Bev Perdue’s budget proposal, which she sent to the General Assembly last month.
 

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com