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Committee advances bill to extend aircraft maintenance sales‑tax exemption to general aviation; opponents call it tax break for wealthy
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Summary
The committee recommended due‑pass for SB 1085 to extend a transaction‑privilege tax exemption on aircraft maintenance to navigational equipment and general‑aviation work. Aerospace firms and local maintenance facilities argued the change attracts MRO jobs; policy advocates warned the measure would shift costs and benefit private jet owners.
Senate Bill 1085, which would expand Arizona’s transaction‑privilege (sales) tax exemption for aircraft maintenance, repair and overhaul (MRO) to include navigational and communications instruments, accessories, and work on general‑aviation aircraft, was returned by the House Ways and Means Committee with a due‑pass recommendation after testimony for and against the measure.
Supporters, including representatives of Bombardier, Gulfstream, Ascent Aviation and local MRO operators, said the exemption creates parity with more than two dozen other states that have chosen to exempt aviation MRO in order to attract large maintenance facilities and associated high‑paying technical jobs. Stuart Goodman, representing Bombardier Aerospace, provided a map showing 34 states with similar exemptions and a prior private study estimating a net state revenue gain of $5.8 million to $11 million after accounting for additional payroll and economic activity.
Opponents included Opportunity Arizona, which asked why Arizona should give a tax break that benefits private‑jet owners and wealthy aircraft operators while working families face higher living costs. Blake Lister of Opportunity Arizona said the measure would “give out tax handouts for jets, including private jets” and argued the fiscal note showed a state revenue reduction likely in the millions. Other witnesses said the fiscal note could not precisely predict revenue impacts because the amount of MRO activity attracted is uncertain.
Proponents responded that aircraft and their operators already choose where to perform major maintenance; if Arizona does not offer a competitive tax environment they will go to other states. Several witnesses emphasized workforce development partnerships with local community colleges and described MRO jobs that begin at higher wage levels and do not always require four‑year degrees.
Committee action: SB 1085 was returned with a due‑pass recommendation (tally: yes 4, no 3, absent 2). Committee members split on the net fiscal effect and on whether the policy should favor the entire aviation sector (including general aviation) or remain limited to common‑carrier air carriers.
