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Committee advances SB1085 to extend aircraft maintenance tax exemptions to general aviation
Summary
SB1085, which would expand transaction-privilege-tax exemptions to include many general-aviation maintenance, repair and overhaul activities, passed out of committee after competing testimony: MRO industry representatives said the change is needed to attract jobs and investment; consumer advocates said it primarily benefits private-jet owners and contains an uncertain fiscal cost.
The House Ways and Means Committee voted to return SB1085 with a due-pass recommendation after testimony for and against expanding a transaction-privilege-tax (TPT) exemption for aircraft maintenance, repair and overhaul (MRO).
Sponsor Senator Tim Dunn said the bill would bring economic activity and jobs by removing sales-tax disincentives for maintenance and refurbishment and cited Bombardier's and other firms' investments in Arizona. "We want that business here," one sponsor witness said.
Opponents, including Blake Lister of Opportunity Arizona, said the proposal risks giving a tax break to private-jet owners and would shift the tax burden onto working Arizonans. Lister said the JLBC fiscal note referenced "millions" in potential state-revenue reduction and called the measure "welfare for the elite."
Industry witnesses countered that 34 states offer similar exemptions and that maintenance work can be performed anywhere; exemptions help attract MRO facilities and high-paying jobs that rely on a competitive tax treatment. Stuart Goodman for Bombardier and Michael Morossi for Ascent Aviation described workforce partnerships with community colleges and large retrofit contracts that could locate in Arizona if the tax treatment is competitive.
Committee members discussed fiscal uncertainty. Some members said a dynamic economic effect could offset initial revenue loss; others cautioned the fiscal note was inconclusive and cited estimated state general-revenue reductions in the low millions. After debate, the committee voted to return SB1085 with a due-pass recommendation and asked fiscal staff to refine estimates before floor action.
The bill's proponents said the exemption aligns Arizona with other states seeking to capture mobile MRO activity; opponents said the policy could disproportionately benefit high-net-worth plane owners and reduce revenue available for other state priorities.
