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Tax exemptions draw aviation business to Colorado SpringsTax exemptions draw aviation business to Colorado Springs

A Colorado city that once touched off an "exodus" of general aviation aircraft from its airport by taxing aircraft, parts, and related equipment has reversed course, bringing new businesses, jobs, and economic opportunity into the community.

The Colorado Springs Municipal Airport "has seen some tremendous aviation industry growth, resulting in part from two AOPA-backed tax exemptions, one at the state level, and one passed locally," said David Ulane, AOPA Northwest/Mountain regional manager.

The aviation sector’s response to the targeted incentives "demonstrates the efficacy of the tax exemptions AOPA’s advocacy team and regional managers strive to bring about across the country," he said.

It’s not just airport advocates in Colorado Springs who are finding out what’s possible when an airport and surrounding industrial area is transformed from tax-burdened to business-friendly: Less than a year after state and local governments passed tax cuts and established an airport commercial zone, a local newspaper recently reported that several employers are moving their businesses to Colorado Springs from out of state, with other prospects expressing interest. Further moves are planned that hold a promise of more job growth.

The actions also may have proved to be the key to realizing the potential of an airport business complex in Colorado Springs.

"Aviation and aerospace manufacturers also have shown increased interest because of the tax breaks in building plants or other facilities in the airport's 900-acre Cresterra business park that has long been envisioned by local officials as an economic hub for the region," reported the Colorado Springs Gazette on Nov. 30.

The exodus—as the newspaper described it—of general aviation aircraft from the Colorado Springs airport began when the city levied the tax on aircraft and parts in 2007, a move that eventually resulted in the loss of about 20 percent of based aircraft to other airports in the region.

The political climate began to shift in 2013, and AOPA "weighed in with significant support" for state legislation to provide aviation manufacturers with an income tax credit of $1,200 per new employee hired. On the local level, Colorado Springs Airport Support Network volunteer Steve Ducoff worked for passage of a city sales tax exemption that would be effective in a commercial zone in and around the airport, with support from AOPA.

"This exemption will allow Colorado Spring’s aircraft maintenance, repair and overhaul (MRO) facilities to become competitive with MRO facilities located in other municipalities and states with such tax exemptions already in place," wrote John Collins, AOPA manager of airport policy, in a September 2013 letter to the Colorado Springs City Council on behalf of AOPA’s 10,200 members who reside in the state.

The Colorado Springs City Council passed the commercial zone measure in April 2014 with a strong 7-2 vote.

Ducoff, a former chair of the airport board, said the effort to support the legislation on all levels was "a concerted effort of the entire aviation community at the Colorado Springs Airport." The group also worked to support Dan Gallagher, who had been appointed by Mayor Steve Bach as interim airport director in 2013, for a permanent appointment. His approval for the post was another step that "unified the aviation community more than ever."

Moving forward, other companies are reported to be interested in what Colorado Springs is offering. More governmental action is also on tap, as a regional transportation authority will soon consider a request to exempt airport businesses from a 1-percent sales tax applicable to land within the transportation authority’s borders.

"We feel confident that they understand what is involved," Ducoff said.

Taken together, the incentives passed and pending are making the Colorado Springs Airport "more enticing to general aviation, more competitive to attract aviation related businesses, and welcome guests to visit the Pikes Peak Region," Ducoff said.

"We’ll be out competing with other cities that have this opportunity as well," he added.

Local airport advocates interested in educating policymakers on the benefits of aviation tax exemptions and other business-friendly measures can find useful information on the AOPA Resources for You Web page.

Dan Namowitz

Dan Namowitz

Associate Editor Web
Associate Editor Web Dan Namowitz has been writing for AOPA in a variety of capacities since 1991. He has been a flight instructor since 1990 and is 30-year AOPA member.
Topics: Aviation Industry, Taxes, Advocacy

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