HIGHER TAXES ON AIRPLANES UPSET SOME

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 4, 1992                   TAG: 9202040347
SECTION: VIRGINIA                    PAGE: B-4   EDITION: METRO 
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE:                                 LENGTH: Medium
HIGHER TAXES ON AIRPLANES UPSET SOME
A change in the method for taxing airplanes based at the Roanoke Regional Airport has angered some aircraft owners and may have caused at least one company to move its plane to another airport.
Jim Hopkins, general manager of Piedmont Aviation Inc., warned Roanoke City Council on Monday that the tax issue could hurt the general aviation business at the airport. And, he said, the airport could lose the Federal Aviation Administration's radar facilities if there is a sharp decline in the number of planes taking off and landing there.
"We are not opposed to paying our fair share of taxes, but this is more than a fair share," he said.
The tax issue could hurt the city's economic development program because it would discourage companies with their own planes from locating in the Roanoke Valley, he said.
Hopkins said the city's personal property taxes on some planes have increased by 400 percent because Commissioner of Revenue Jerome Howard has started using a new approach to determine the value of aircraft for tax purposes.
Howard has begun assessing business and corporate planes on the basis of their fair market value, the same method used for assessing privately owned planes.
Previously he used a depreciation system for assessing business and corporate planes, reducing their value to 20 percent of the cost after five years.
Hopkins cited one case in which the tax on a plane increased from $800 to $3,300.
Howard, who assesses the planes and other personal property, said state law allows him to use either the fair market-value system or the depreciation method. He thinks the fair-market approach is the fairest.
Although council is not involved in assessing the planes, it can lower the tax rate to offset the higher assessments, Hopkins said.
Many localities in Virginia have a lower tax rate on airplanes than cars, trucks and other motor vehicles, he said. Roanoke's tax rate on planes is $3.45 per $100 assessed valuation, the same as cars and other vehicles.
Vice Mayor Howard Musser, part owner of a plane based at the airport, said he shares Hopkins' concerns about the effects of the higher taxes.
Council referred Hopkins' complaints and request to City Manager Bob Herbert and his staff for a recommendation.

by Bhavesh Jinadra by CNB