Committee lays over bill giving 50% property-tax exemption for airport-leased property in mid-size cities

Senate File 1027, carried by Senator Hauschildt, would create a 50% property-tax exemption for certain leased airport property in communities with populations between 50,000 and 150,000 for a 10-year period. The bill specifically targets airports that are not owned or operated by the Metropolitan Airports Commission and was described in committee as applying to Duluth, St. Cloud and Rochester.

Senator Hauschildt told the Taxes Committee that businesses operating on airport property must lease land and often pay operational fees to airport authorities while still paying property tax on the leased parcel — a combination she said can function like "double taxation" and discourage investment. She said the exemption is intended to stimulate local economic development, retain aviation manufacturers and attract new employers in Greater Minnesota.

Tom Werner, executive director of the Duluth Airport Authority, testified that Duluth’s aviation cluster produces roughly $1.4 billion in annual economic impact and supports more than 4,000 jobs (direct, indirect and induced). Werner said a 50% exemption for qualifying leased airport property would provide a competitive economic-development tool for Duluth.

Dante Tomassoni, director of corporate affairs for Cirrus Aircraft, said Cirrus employs about 1,700 people in Minnesota, supports more than 100 suppliers in-state, and that tax and ownership rules can disincentivize investment on airport property. Tomassoni said the bill, together with related measures, would help Minnesota retain and grow aviation manufacturing and supporting industries.

Committee members emphasized the bill is targeted to airports not overseen by the Metropolitan Airports Commission and noted the measure has a modest general-fund impact in the revenue estimate. Senate File 1027 was laid over for possible inclusion in the omnibus tax bill.