State Taxes

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Call to Action: Support Arizona Aviation Tax Reform

February 20, 2014

NBAA strongly encourages Members in Arizona to support the amendment to Senate Bill 1174, which will reform the aviation tax system in Arizona and promote economic growth. The legislation has been voted out of the Commerce, Energy and Military Committee, and is continuing through the legislative process in Arizona. Organizations including the Arizona Business Aviation Association and Scottsdale Chamber of Commerce are strong supporters of the legislation.

The amendment to Senate Bill 1174 contains the following provisions which are designed to attract additional aviation business and jobs to Arizona:

  • Clarifies that the annual license tax will only be imposed on aircraft based in the state for more than 90 days- removes license tax on aircraft that remain in Arizona for more than 90 days but less than 210 days.
  • Eliminates current one-half percent license tax for aircraft based in Arizona and replaces it with a simplified flat rate structure:
    • Single-engine reciprocating: $250
    • Single-engine turboprop: $750
    • Single-engine turbine: $1500
    • Multi-engine reciprocating: $500
    • Multi-engine turboprop: $1500
    • Multi-engine turbine: $3000
  • Creates a tax exemption for aircraft parts and avionics installed in Arizona.
  • Expands the existing tax exemption for aircraft purchases to residents of Arizona.

The goal is to make this bill revenue neutral through a potential slight increase in the aviation fuel tax and projected increases in tax revenues from greater aviation activity in Arizona should the bill become law.

Review Amendment to Senate Bill 1174

Member Action

When contacting elected officials, Members should explain that this legislation will encourage aircraft operators and aviation companies to locate in Arizona generating additional jobs and actually adding to the tax base. With aerospace manufacturers such as Honeywell located in Arizona, this bill will result in additional growth and encourage more companies to locate in the state.

Ultimately, these pro-business incentives will create a positive impact to the general fund through growth in aviation property utilization and development, creation of aviation and other industry jobs, and promotion and growth in many of Arizona’s key industries (travel, tourism, technology, health care).

Contact your Arizona elected representatives

NBAA Action

Since this legislation was introduced, NBAA and the Arizona Business Aviation Association (AZBAA) have been working directly with legislators and Arizona-based Members to build support for Senate Bill 1174. The following actions have been performed:

  • Reviewed and provided feedback on the draft legislation.
  • Provided data to the Aviation Coalition of Arizona on the economic benefit that business and general aviation provides to the state.
  • Communicated directly with local/regional groups such as AZBAA to support the legislation.

Business Aviation in Arizona

Business and general aviation provide the following economic benefits to Arizona:

  • Across Arizona, 6,890 people are employed in the general aviation industry, with wages and benefits totaling $261 million.
  • According to a 2013 Economic Impact of Aviation in Arizona Statewide Report, general aviation generates $609 million in economic activity annually.
  • The aviation industry connects communities: rural, interstate and international. There are more than 80 public use airports in Arizona, but just five that provide commercial airlines services for Arizonans.
For additional information, contact NBAA's Stacy Howard at (480) 987-0352 or [email protected].