As the legislative calendar begins in statehouses across the U.S., officials with the National Business Aviation Association (NBAA) and regional aviation groups are building support for tax reforms to promote growth in general and business aviation.
“We have efforts going on in about a dozen states to seek new, common-sense tax policies that foster the growth of business aviation,” said Scott O’Brien, NBAA’s senior manager of finance and tax policy.
The start of the year is always a busy time for O’Brien and NBAA’s regional representatives, as they work with local groups to set priorities for advocacy in each state capitol.
This year, local groups are getting more proactive than ever, seizing upon a shift in the political current, according to NBAA officials.
“Five years ago, we were fighting off more bills than we were promoting,” said NBAA Director of Regional Programs Steve Hadley, recalling when cash-strapped states considered eliminating aviation sales and use-tax exemptions to raise revenue.
Years of advocacy, with NBAA and local groups working together, saved many of those exemptions, according to NBAA officials. Lawmakers came to realize that aircraft are mobile assets, and many now are proposing exemptions in even more states.
“This is the second wave,” said Greg Voos, NBAA’s Southeast regional representative. “States are starting to feel competition for aviation business from surrounding states. It doesn’t even take two hours for an aircraft to cross into a state with tax policies that support business aviation.”
For example, Georgia, Alabama and the Carolinas all have lower sales tax rates or caps for aircraft than Florida. Consequently, several groups in the Sunshine State are working with NBAA and others to support a sales and use-tax exemption for general aviation aircraft. The Florida Aviation Business Association is partnering with the Tampa Bay Aviation Association and the South Florida Business Aviation Association in these advocacy efforts.
In Virginia, local groups are pushing for a sales-tax exemption on aircraft maintenance and parts. Virginia doesn’t have large repair shops, so many operators go out of state for maintenance. However, Virginia does have many airports with land that could be developed, so the exemption could attract maintenance, repair and overhaul organizations to the state.
“Virginia is doing it right,” said Voos. “They want to expand every aspect of aviation. The exemption that the Virginia Aviation Business Association and Greater Washington Business Aviation Association have proposed includes unmanned aircraft systems, because they see that as a growth area.”
To support this effort, NBAA is conducting a survey of members that might be interested in new repair facilities in Virginia.
Similarly, the Michigan Business Aviation Association (MBAA) is working to broaden the state’s maintenance and parts exemption, which is currently limited to aircraft registered and based outside the state.
“Our membership is seeing jobs going to Ohio, Wisconsin, Illinois; the states around us that have done a lot to make their aviation sectors more competitive,” said MBAA Chairman Rich Belisle. “Our focus is to give Michigan a level playing field.”
MBAA also is considering a survey of maintenance providers in the state to gauge the exemption’s impact. Belisle says his group has learned from the experience of other local business aviation groups, identifying which approaches to advocacy have worked and which haven’t.
Using this network, groups are organizing to support tax initiatives in Arizona, Colorado, Kentucky, Louisiana, Maryland, Texas and Wisconsin.
“Right now, we’ve got the momentum,” said Hadley, “and we’ve got to keep it going.”