Wisconsin Passes Sales-Tax Exemption for Aircraft Parts and Labor

April 9, 2014

Wisconsin Gov. Scott Walker earlier this month signed new legislation that exempts sales tax on aircraft parts, maintenance and repairs for aircraft used in non-commercial operations, and signed the bill into law at Gulfstream Aerospace Corporation’s facility in Appleton, WI.

The new exemption becomes effective on July 1, 2014.

“This new exemption provides Wisconsin aviation businesses a level playing field with aviation businesses in nearby states that already have a similar exemption,” said Bob Quinn, NBAA’s central regional representative. “NBAA applauds the Wisconsin legislature and Gov. Walker for their commitment to a thriving aviation industry in their state. This bill will help create more jobs, which tend to be highly skilled and well compensated, for general aviation businesses in Wisconsin.”

“NBAA was contacted by staff members in the Wisconsin legislature early on in the process and asked to provide data on how other states tax aircraft parts and labor,” said Scott O’Brien, NBAA’s senior manager of finance and tax policy. “This information was critical in explaining to legislators the need for Wisconsin to pass the exemption in order to compete with surrounding states.”

While the legislation is expected to slightly lower the state’s tax revenue, the increased revenue realized by keeping aviation maintenance business in the state of Wisconsin is expected to far exceed that loss. This has consistently been the result when other states implemented similar exemptions. An official statement issued by the governor in 2013 indicated that Wisconsin’s aviation industry supports more than 90,000 jobs, which generate $7 billion in annual economic activity and $3.5 billion in personal income.

Some think the bill could have an even more substantial impact by bringing new businesses to Wisconsin.

“This legislation gives Wisconsin an opportunity to attract new authorized repair shops to our area, which creates additional income for the state through employment and fuel taxes,” said Matthew Dean, executive director of the Wisconsin Business Aviation Association. “This bill creates a level playing field for both small owner/operators and business aviation users alike.”

Bruce Botterman, vice president of New View Technologies, an aircraft window repair company based in Oshkosh, WI, said, “This legislation gives us an opportunity to retain jobs and increase the jobs in the state in the future. Aviation jobs are highly technical, well-paying jobs, so it can have a big impact if individuals in those positions leave the state.

“Wisconsin was surrounded by states that had sales tax exemptions on labor or parts, or both labor and parts,” he added. “Finally, we can be competitive with the businesses in those states.”