Governor Signs Washington State Luxury Tax Repeal

Yesterday, Washington Gov. Bob Ferguson signed HB 2711, the repeal of the 10% luxury tax on general and business aviation aircraft that had been approved last April and set to take effect today. The tax would have applied to new and preowned aircraft purchases valued at more than $500,000 and also would have imposed use taxes on operators of aircraft so valued.

As the repealed bill SB 5801 was intended to provide funding for transportation programs, the replacement bill includes an increase in aviation fuel taxes, to 25 cents from 18 cents per gallon, and a higher aircraft registration fee, which will climb automatically by 2% per year.

According to the Pacific Northwest Business Aviation Association (PNBAA), “When SB 5801 was passed last year, establishing a 10% tax on the original value of aircraft owned, leased, or purchased in the state, aircraft began moving out of Washington. Service providers began losing customers. Ultimately, general aviation in Washington shrunk significantly over the past year.”

To counter the deleterious effects of SB 5801, PNBAA hired a lobbyist, met with legislators, petitioned the senator who sponsored SB 5801 (and joined his working group to help fix the problems in the original bill), and mobilized aviation interests in Washington to help find a better solution.

“This outcome demonstrates the power of a unified voice and the importance of strong industry leadership advocating in Olympia for general aviation in Washington,” PNBAA said.

CenterPoint Aviation Law’s Alan Burnett, PNBAA director of legislative affairs, led the PNBAA effort. He was assisted by Stephen Ratzlaff, Friends of Boeing Field and Washington Seaplane

Pilots Association; Mike Ennis of Ennis Public Affairs; Phil Derner, NBAA regional director; and Maddie DuBray, PNBAA managing director, along with many others.

“The success in halting the original aircraft tax is a win for job creation, local investment, and economic opportunity,” said Derner. “The measure signed [yesterday] represents the views of a wide range of stakeholders and, importantly, ensures our seat at the table as an active, contributing neighbor in the state of Washington.”