AAR Corp. seeking sales tax credit from School Board
Published 8:13 pm Thursday, October 3, 2013
AAR Corp. is seeking a sales tax credit from the Calcasieu Parish School Board — a request that was denied to Aeroframe in April, three months before the company ceased operations.
Illinois-based AAR is also pursuing credits from the Lake Charles City Council and the Calcasieu Parish Sheriff’s Office, said Danny Martinez, AAR technical services vice president. As of Thursday, AAR had not requested a specific amount, said Karl Bruchhaus, the school system’s chief financial officer.
“One of the things we knew we had to work on, but we also counted on, was getting relief for the sales and use tax,” Martinez said. “Everywhere else we operate on, that’s almost like an automatic.”
The School Board is expected to vote on the item and hear from AAR representatives at its regular meeting at 4:45 p.m. Tuesday, Oct. 8.
AAR opened operations at Chennault International Airport in early August and will support a 750-job aircraft maintenance, repair and overhaul operation.
Martinez said he hopes that board members understand there is a “competitive need” for the tax credits.
In April, the School Board budget committee voted down a request to renew a $600,000-per-year sales tax credit for Aeroframe Services because the renewal was not in the best interest of the system, which faced a $13 million deficit next fiscal year.
“Of course there is a bit of concern there,” Martinez said. “This isn’t a given in any way shape or form.”
In 2003, the School Board approved a $5,000-per-employee tax credit for each Chennault International Airport facility that repairs or refurbishes aircraft or related components. More than $5.4 million has been exempted since 2003. The arrangement expired at the end of May.
Bruchhaus told the committee before the vote that the agreement was made “in a different economic climate than we are in now.” But he recommended the committee renew the credit.
For Aeroframe, the estimated value of the credit would have started at $600,000, or 100 percent of $5,000 per employee, and decrease by $120,000, or 20 percent of $5,000 per employee, each year for the next five years.
