Arkansas Aero Alliance Concerned Over New Tax Plans

The Arkansas Aerospace and Defense Alliance is concerned about overtures from the state that could threaten tax-exempt status for some of its members. Executive director Chad Causey told AIN during the 2018 Arkansas Aerospace and Defense Summitlast week that meetings are planned later this month to explore ways the state could reclaim tax revenue that would be lost if a pending upper-tier individual income tax exemption is approved. Some of that tax revenue could be replaced in the state’s coffers by imposing sales taxes on aircraft work that is currently exempt.

Jonathan Rose, who operates Afterglow, a paint, refurb, interior, and detailing service in Springdale, Arkansas, said removing the 9.7 percent tax exemption would be a big blow to his business in the state. “It could represent a difference of $10,000 [on a typical service],” he told AIN. Rose is concerned that he will face “eating the cost” of the taxes with a reduced invoice to the customer or losing the business to another shop in a bordering state that does offer tax exemption for aircraft work.

“These tax exemptions include aircraft of more than 12,500 pounds [mtow],” said Causey. “We’ve been trying to expand the exemptions to include aircraft down to 9,500 pounds. The Alliance will be planning to attend the meetings next month to explain how these tax exemptions are vital to our members’ business in Arkansas.”