January 17, 2019 11:08:37 AM
In 2004, the Mississippi Legislature made a change in a law applying to the state's airports in a well-intentioned effort to help our state's regional airports improve service and attract customers.
The change allowed airports to waive taxes on businesses located at the airport. The idea was that offering the incentive might help airports attract businesses that would complement and enhance air service through businesses such as rental car, taxi, food service and other vendors.
It was a good idea. Here in the Golden Triangle, we have a thriving airport, but that's not the case in many communities where regional airports struggle to attract carriers (many of them rely on federally-subsidized commercial traffic, which essentially pays carriers to serve the airports).
While it's hard to gauge how successful that change in the law has been over the last 14 years, it certainly has done no harm
That changed this spring, however, when the owner of a strip mall located on airport property in Rankin County sued the county for collecting taxes. According to the strip-mall owner, his business was exempt from those taxes based on that 2004 change in the law. The Mississippi Supreme Court ruled in favor of the businessman, a ruling who impact was immediately felt far beyond Rankin County.
For obvious reasons, airports are located over very large parcels. Given the proximity of Golden Triangle Regional Airport to the county's industrial park, the location is appealing to area industry.
Three major industries are located on GTRA's property -- Airbus, Aurora Flight Sciences and a portion of Stark Aerospace. Combined, those companies pay a little more than $800,000 in county and school taxes per year. Together with the taxes paid by several other small businesses located on GTRA property, the ruling meant $1 million in lost revenue, $800,000 by the Lowndes County School District.
These industries are important to our community, not just for the taxes they pay but also for the jobs they provide. They also provide tons of commercial passengers for GTRA. Approximately 80 percent of the airport's passenger service is business travel.
But the law governing tax-exemptions on airport property was never intended for these kinds of businesses. For all the benefits they provide, they have zero direct effect on airport operations. Having a car rental company located at the airport helps GTRA attracts customers. Having a helicopter plant on airport property does not.
Wednesday, Rep. Jeff Smith of Columbus introduced a bill to clarify the language of the bill to make sure it serves its intended purpose.
Although not part of the bill as it was offered by Smith, "opt-out" language will be added in committee which will allow counties to waive taxes for any businesses that locate on airport property. For some airports, offering tax incentives to attract non-airport related businesses is an important economic development tool.
When the bill reaches the floor, Smith insisted that county-option will be in place.
Closing the loophole in the law -- with an opt-out option -- will help many counties and their school districts and will not harm any.
If ever there was a bill that deserved the full support of legislators, it's this one.
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