Posted on: Thursday, May 31, 2001

Interisland airlines to receive excise tax break

By Lynda Arakawa
Advertiser Capitol Bureau

Gov. Ben Cayetano yesterday said he will sign into law a bill that will give interisland airlines a tax break.

House Bill 1685 would exempt lease payments for aircraft and aircraft engines used for interisland transportation from the state's 4 percent general excise tax.

"The question as to whether this particular kind of a business should be given a tax break is something of a policy call," Cayetano told reporters yesterday. "From my point of view, it is in the state's interest to help the airlines keep their costs down because we all know that in the end it's passed onto the passengers — most of whom are local people — and the price of airfare between islands goes up. So I think that this is an appropriate move."

Cayetano last year vetoed a bill that would have given Hawaiian Airlines a 2 percent tax credit for payments it planned to make to lease new airplanes.

Cayetano said he vetoed the bill because it would have only benefited Hawaiian, while the bill he will sign will apply to any airline involved in the business of interisland travel.