A bill introduced in the Illinois Senate Feb. 18 would expand an aircraft maintenance sales tax exemption, lower taxes on aviation fuel, and dedicate fuel tax revenue to fund airport improvements.
Senate Bill 1280 would exempt aviation fuel from the state’s 6.25 percent sales tax and instead impose a 10-cents-per-gallon aviation fuel excise tax. Revenue from this tax would be reserved strictly for aviation purposes in the aviation fuel tax fund, which goes toward airport infrastructure improvements. The bill also would expand an existing aircraft maintenance sales tax exemption to include aircraft engine work.
“By expanding the current sales tax exemption on aircraft maintenance, the Legislature can ensure Illinois’ aviation maintenance providers operate on a level playing field with several neighboring states that have recently enacted similar exemptions,” said Bryan Budds, AOPA Great Lakes regional manager. Indiana maintenance companies reported an increase in business after that state enacted similar tax reforms. The state expanded its sales tax exemption for aircraft maintenance the following year. Another neighboring state, Wisconsin, also enacted a sales tax exemption for parts and labor used in aircraft maintenance in 2014.
“Further, the aviation fuel tax reform contained in Senate Bill 1280 brings Illinois aviation fuel tax rates into competition with other regional aviation leaders while strengthening the state’s ability to support its airports and secure additional federal airport funds,” Budds added.
AOPA supports work by the Illinois Aviation Trades Association to promote the Illinois bill and plans to support the legislation in a letter to committee members and in person in Springfield.