WA State Excise Tax Issue Nears Critical Juncture

February 26, 2010

NBAA recently sounded renewed concern with a new Call To Action over the possibility that Washington State aircraft owners could be confronted with an excise tax increase of up to 1,400-percent.

“This enormous new excise tax on aircraft would be a very bad precedent, not just for Washington State operators, but for everyone,” said Kristi Ivey, NBAA Northwest Regional Representative. “Now is the time to step up and let your legislators know of business aviation’s opposition to this new tax.”

State House Bill HB 3176 and companion Senate Bill SB 6873 call for a new 0.5 percent excise tax to replace the current Washington State aircraft registration fee. The measure would cost a company owning just one business aircraft valued at $10,000,000 an additional $50,000 in tax annually. If enacted, it would create the highest aircraft registration rates in the nation for several types of aircraft.

Although the excise tax is not included in the spending budget recently introduced by Washington’s Governor, Chris Gregoire, Senate Democrats have endorsed the new tax and announced that they have enough votes to pass the tax package. House Democrats are expected to unveil their modified bill soon, and the tax could be included in their plan.

NBAA’s renewed call to action came in part because of the immediacy of the threat. The proposed excise tax will likely be passed – or defeated – by March 11, since that’s when the current session ends for the Washington State legislature.

NBAA’s Ivey testified February 13 at a House Finance Committee hearing on the bill, telling lawmakers that the proposed tax increase “will make it difficult, if not impossible, for some operators to remain competitive in the marketplace.” She added that some aircraft operators would move to other states, losing jobs and revenue for Washington state.

Among the Washington State aviation leaders working with NBAA to prevent imposition of the new aircraft excise tax have been Peter Galvin Anderson, president of Galvin Flying Services in Seattle; Chuck Kegley, the owner of Advanced Aviation Services in Seattle, who is also a member of the Board of Directors for the Northwest Business Aviation Association; and John Dobson of the Washington Pilots Association.

Kegley said: “Four of my customers have already told me they will locate out of state if this tax proposal goes through, and..these are not idle threats. This tax would decimate the aviation industry in Washington State. “We’ve had great support from the pilot and service industry community so far,” Kegley continued. “NBAA’s call to action certainly helps, and the Washington Aviation Coalition has agreed to get the word out to the Coalition’s members. It’s a real grass roots effort.”

Review the NBAA Call to Action: Proposed Washington State Tax Increase on Aircraft.