Proposed tax hike would hurt Washington State's bottom line

February 25, 2010

A proposed hike in the excise tax for aircraft in Washington State would hurt pilots, the aviation industry, and ultimately the state economy, AOPA says.

House Bill 3176 would impose a 0.5 percent annual excise tax “for the privilege of using any aircraft in the state”—increasing some aircraft owners’ fees tenfold and creating the highest registration rates in the nation for many types of aircraft. The proposal was met with strong opposition from pilots, aircraft owners, and aviation groups; AOPA is working to channel that energy into a message that will resonate with legislators who are grappling with a budget deficit.

AOPA Northwest Regional Representative Mike Ferguson testified against the tax in a hearing Feb. 13, and AOPA Vice President of Airports and State Advocacy Greg Pecoraro traveled to Olympia to explain to House leaders how the tax would overburden pilots, drive aviation-related business and economic activity to other states, and saddle the aviation division of the Department of Transportation with the high cost of enforcement.

“The perception among many legislators is that pilots are affluent and can afford to pay this extra tax. But small business owners or professionals who depend on their aircraft for their business needs could be easily forced out of aviation altogether,” Pecoraro said. “Not only that, but the decline in aviation activity and the resulting loss of economic activity, jobs, and tax revenue will more than offset any short-term gain in revenue the tax might produce.”

Pecoraro pointed out that aircraft owners and aviation businesses may choose to relocate to other states or  just sell their aircraft outright if faced with such a high fee. The cost to renters also would increase, and renter and student pilots would be able to fly less. The cumulative affect will be a dramatic drop in aviation activity in the state, which will have a domino effect on state revenues, airports, and many businesses that depend on aviation. 

Pilots can help prevent the tax by contacting their state representative and telling the story of how the tax could affect them. AOPA is circulating a briefing paper among local pilots and aviation groups, businesses, and other associations that outlines the economic detriment of this proposal; the Washington Pilots Association and the Washington Airport Managers Association are also rallying local members to get involved.

Current excise taxes on aircraft in Washington range from $35 for a sailplane or homebuilt Experimental to $140 for turbojet multiengine airplanes. The annual fee for a single-engine airplane is currently $65, but the proposed tax would raise that to $500 for a $100,000 aircraft.