Aviation Business Says Precedent Justifies $3.4M Tax Challenge

Signature Flight Support Organization, an aviation business at Westchester County Airport, confirmed this week that it has brought the Town of Rye to court claiming it should be tax-exempt because other similar “Fixed Base Operation” lessees at the airport do not pay taxes.

Signature is a private hanger and general aviation services company that leases space at the Westchester County Airport that recently brought the Town of Rye to New York State Supreme Court, Westchester County, over its tax assessment.

Following recent news that Westchester County has decided to intervene in the court proceeding, Signature read a prepared statement to Patch.

Because other similar businesses at the airport classified as "for public use" are tax-exempt, in order to compete fairly with those businesses Signature should also not owe Town taxes, according to Signature’s Northeast Regional Vice President Dawn Gallina.

The company has been a tenant at the county airport for 15 years, has consistently paid all its taxes, supports the local economy and provides 31 local jobs, Gallina said.

If Signature prevails in its court proceeding, back taxes would cost the Blind Brook school district $2.3 million, the Town of Rye, $9,000; The Village of Rye Brook, $703,000 and Westchester County, $404,000, according to County Legislator David Gelfarb. Also, in the future, Rye and the County would lose about $500-600,000 in taxes that the company was paying each year. In 2011, Signature paid $575,000 in taxes, Gelfarb said.

Westchester County legislators have voted to intervene in the case that Signature has brought against the Town of Rye and to uphold its lease with Signature. The lease contains language that states Signature cannot challenge its requirement to pay taxes, according to Gelfarb.

Gallina said that “Signature’s actions are clearly justified” based on other court decisions that have upheld the tax-exempt status of other Fixed Base Operations like Signature at the county airport.

Gelfarb told Patch he did not know why any FBOs at the airport were not required to pay taxes.

In the time leading up to the lawsuit, Signature held meetings with representatives from the Town of Rye and the school district in order to try to “reach an amicable resolution on the matter,” Gallina said, but a resolution was not found.

“After negotiations were rejected by the Town of Rye and the district, Signature Flight took action to obtain the same fair and equitable treatment as its competition,” Gallina read from the statement.

The other two FBOs similar to Signature, Panorama and Million Air, have been tax-exempt because they are considered “for public use,” Gallina said. She would not elaborate on the difference between those two and Signature or if Signature is considered "for public use."

In 2009, the Town of Harrison attempted to reverse Panorama's tax-exempt status. Panorama then filed a lawsuit against this action and the court ruled in favor of Panorama keeping its tax-exempt status.

“(Signature’s action) is clearly justified based on the Panorama decision in a New York Court,” Gallina said. 

Signature is aware that the County has decided to intervene in the court matter and is looking forward to "continuing the dialogue," Gallina sai. 

Do you think that the FBOs should all be required to pay taxes? Should Signature be made tax exempt? Share your thoughts in the comments.