June 15, 2015

A three-year effort by Nevada aviation groups and industry stakeholders, led by NBAA, culminated recently in Gov. Brian Sandoval signing into law Assembly Bill 161 abating certain tax liabilities for those who own, operate, manufacture and service general aviation (GA) in Nevada.

With the exception of Oregon, which has no state sales tax, all states bordering Nevada offer varying levels of tax exemptions regarding the sale, operation and repair of GA aircraft. Lack of a similar policy left the state at a competitive disadvantage for attracting new aviation-related businesses, and customers from outside Nevada for existing aviation companies.

“Following his June 2013 proclamation of the importance of general aviation to his state, Gov. Sandoval reached out to NBAA and other industry stakeholders for a ‘wish list’ of areas where Nevada could better support the growth of its aviation industry,” said Stacy Howard, NBAA’s Western regional representative. “He told us that he wanted to do something that would back up the proclamation’s message, and a partial tax abatement was near the very top of our list.”

Review Nevada’s 2013 proclamation.

Nevada’s Legislature meets during odd-numbered years, and initial efforts to pass partial tax abatement legislation in 2013 failed. Stakeholders used the time since then to mobilize the state’s aviation industry for a renewed push in the current session.

To that end, NBAA initiated discussions with Members in the state, and the newly formed Nevada Business Aviation Association, to help sponsor industry events where community leaders could learn more about the industry. Representatives also met with leaders in the state assembly, and in the Governor’s Office of Economic Development.

The economic development potential for Nevada, a primary factor behind lawmaker support for the abatement, was validated through an economic impact analysis commissioned by the Reno-Tahoe Airport Authority that estimated the measure would lead to up to 1,348 new full-time equivalent jobs in the state, paying total wages between $16 and $54 million.

“The airport authority took the initiative in working to develop an independent economic impact study, which NBAA actively participated in, and was key to achieving passage of the abatement,” said Scott O’Brien, NBAA senior manager, finance and tax policy.

The Nevada law differs from aviation tax policy bills in other states. For example, the Nevada Constitution prohibits any exemptions from state taxes, so the abatement applies to certain local taxes where applicable. It also requires companies to apply for the abatement, and regularly demonstrate their commitment to growing the state’s aviation industry.

“Companies must prove they have a significant presence in the state, including verification of employment and planned investment levels,” O’Brien explained. “Meet those standards, and the abatement will extend for a maximum of 20 years. Should businesses fail to meet those requirements, however, it can be revoked.”

Several companies have reportedly applied for the abatement since Sandoval signed the measure into law on June 8.

Review Nevada Assembly Bill 161.