AOPA defends Virginia's aircraft maintenance sales tax exemption

AOPA was a key component in getting the bill passed in 2017, testifying in favor of the measure and the benefits it would bring to the state. AOPA argued that the tax incentive would lower costs for pilots, stimulate competition, and boost the local economy. According to the Virginia Department of Aviation Economic Impact report, the commonwealth’s 66 public use airports support more than 146,000 jobs and generate $23 billion in annual economic activity. Airports and aviation businesses are a significant part of its success.

Now, with a looming sunset date of July 1, AOPA is working to keep the sales tax provision alive through supporting legislation in the Virginia House of Delegates and Senate.

Sponsored by Del. Terry Austin (R-District 19) and Sen. Jennifer Kiggans (R-District 007), H.B.462 and S.B.701 aim to eliminate the sunset provision of a sales tax exemption on aircraft maintenance, including parts and labor. Backed by AOPA, the National Business Aviation Association, and VABA, the bill was heard in the House Finance Subcommittee on January 24.

In a memorandum of support, AOPA highlighted the importance of keeping Virginia’s aircraft maintenance tax exemptions, arguing that expense is a major driver of deciding where to base and service aircraft. “Those states that enjoy the greatest gains in economic activity employ the broadest range of incentives, avoiding sunset provisions that serve only to stifle longer term investments. The cost of aircraft parts is typically uniform across a region. The primary difference in cost to the consumer is a combination of tax and convenience,” AOPA wrote.

Since Virginia’s sales tax exemption was introduced nearly five years ago, pilots and aircraft owners have been reaping the benefits and have saved money on maintenance and repair costs. Meanwhile, Virginia-based aviation businesses have been able to compete with neighboring states such as Maryland, West Virginia, Pennsylvania, and North Carolina that offer similar incentives.

Should the exemption expire, the cost of maintenance would increase for both owners and renters. Additionally, airports and aviation service providers would see a competitive disadvantage as jobs would be lost to neighboring states.

AOPA encourages its members in Virginia to contact their local delegates and urge them to support H.B.462.