Greater Washington Business 
Aviation Association

The Virginia General Assembly

VABA Legislative Update

February 6, 2017

Aviation parts and supplies sales tax exemption moves through House.

HB1738 has come out of the House Committee on Finance to the House floor. Delegate Richard Anderson of Woodbridge introduced HB1738, a bill that eliminates the sales and use tax on parts and supplies used for maintaining, repairing or reconditioning aircraft, including unmanned aerial systems. During the 2016 Virginia General Assembly session, the VABA requested Senator Steve Newman, Lynchburg to call for a study comparing Virginia to its neighboring states relating to the economic impact of state aviation parts and supplies sales tax exemptions offered in surrounding states. The study was assigned to the Joint Commission on Technology and Science as a part of a large study on the economic benefits the aviation and aerospace industry in Virginia. Delegate Richard Anderson, Woodbridge and Chair of JCOTS singled out the sales tax exemption to its own study within JCOTS. With the assistance of the VABA, NBAA, AOPA and GWBAA, JCOTS performed the study interviewing numerous aviation businesses, corporate aviation departments, other state’s aviation organizations and businesses to better determine the impacts such tax exemption in surrounding states was having on Virginia and the aviation industry. The study findings were astounding and bore out that Virginia was exporting easily hundreds of millions of dollars annually to other states on work that otherwise could be performed in Virginia aviation maintenance, repair and overhaul facilities. As a result, Del. Anderson, a retired Air Force Colonel and former pilot patroned HB1738. As of Friday HB1738 was reported out of the House Finance Committee to the full House of Delegates for hearing. Once passed through the House the bill will be heard in the Senate through what looks to be a grueling hearing process. Getting this legislation this far has been no easy task. As the state has faced a budget deficit, lawmakers have been struggling to find much needed revenues to run the state. Giving up much needed tax revenue in a tough fiscal year is no easy task. With the help of Del. Barry Knight, Virginia Beach and Del. Lee Ware, Chairman of the House Finance Committee, committee members saw the economic benefit for passing this legislation forward. Knight, the only active pilot in either house was very instrumental in explaining to others how easy it is for aircraft and rotorcraft owners to go out of state to maintain their aircraft and the resulting cost saving in doing so. Virginia aviation businesses will be asked to call their Senators asking their support for this significant piece of aviation business legislation. To find out who your Senator is please go to the “Who is my legislator” tab, enter your home address to determine your Senator and Delegate. Please email and call your Senator and Delegate to advise of your support for this legislation.

House Resolution declares third week of August as Virginia Aviation Week

Delegate Danny Marshall, Danville, approached the VABA during the late summer looking for a better method to promote Virginia airports. Viewing his own airport in Danville (KDAN), Marshall was looking for a way educate Virginian’s and especially law makers as to the benefit of Virginia airports and aviation businesses and their contribution to the economic vitality of Virginia and the communities they serve. The result is House Joint Resolution 610. With the assistance of AOPA, NBAA and VABA staff prepared the resolution that has passed the House of Delegates and will be heard by the Senate Rules Committee later this month.

Anderson creates Virginia General Assembly Aviation Caucus

At the request of the VABA, Del. Rich Anderson, Woodbridge, the Virginia General Assembly Aviation Caucus has been established to help better educate legislators as to the benefits and needs of the aviation community within Virginia. As we travel the Commonwealth and visit Virginia’s airports, it has become more and more evident of a disconnect between aviation, local and state government and the public in general as to the true benefits Virginia’s aviation community brings to the Commonwealth and the communities they serve. The intent of the Virginia General Assembly Aviation Caucus is to better educate legislators on policy issues impacting aviation and the growth of aviation and aviation assets in the Commonwealth.

Other issues before the Virginia General Assembly

The VABA is monitoring a number of bills relating to the use of drones. While the VABA may support the intent legislators have held with what they want the legislation to accomplish, the VABA has worked to assure that the rules governing the use of airspace is protected. Legislators, rightly so are trying to stop the use of drones for improper uses, including surveillance of others or property and the like. The VABA has held the position that existing criminal statutes on trespass, peeping tom statutes and other activities exist and can be strengthened without Virginia law extended to the use of airspace. History will support us that as the use of drones continues to increase, especially among hobbyist, these types of bills will continue to surface and the VABA will have to carefully monitor such legislation to assure that there are no adverse impacts on the aviation community.

As I write you, the 2017 Session of the Virginia General Assembly is getting ready for Crossover, the date by which each House must complete its work on a bill and send it to the other body. This is the halfway point of the legislative session. This year’s session is unusually busy. This is strange in that it is a short session and an election year. Typically this is a time when legislators and citizens try to take it easy. This year however, legislators, lobbyist, staff and the administration all agree that this legislative session is more intense than most and the legislation being considered is less political but high in substantive policy issues. During the 2017 legislative session 2,544 bills and resolutions have been introduced. As of today 787 bills have failed, 331 passed both houses and 1,668 bills are left to take action on. That number will continue to dwindle as the session moves on. A point of trivia. The Virginia General Assembly deals with as much legislation during its 45 / 60 day period as the United States Congress does during a full year.

Last Wednesday evening we held the annual legislative reception at the Library of Virginia. The event was well attended and from all the responses we have received at this point was also well received. Delegates Richard Anderson, Barry Knight and Danny Marshall and Senator John Cosgrove hosted the evening reception. Please note that Del. Knight is still the only member of the General Assembly that is an active pilot using his helicopter for his business and commute.

Governor Terry McAuliffe joined us at the event making short comments to the crowd of almost 500 - this was the first time a sitting Governor attended the reception, which was joined by a record number of legislators and staff. In addition, NASA Langley and Wallops had a significant exhibit in the library and the following sponsors contributed to making the 2017 VABA Legislative reception a huge success.

  • AMA, Inc.
  • City of Hampton/Hampton Economic Development
  • Delta Airport Consultants
  • Freedom Aviation
  • Liberty University
  • LJT & Associates
  • NASA-Langley Research Center
  • NASA-Wallops Flight Facility
  • National Institute Of Aerospace
  • Nexutech, LLC
  • RS & H
  • Science Systems Applications Inc.- SSAI Hampton
  • Signature Aviation
  • Talbert & Bright
  • USI Insurance Services
  • Virginia Academy of Science, Engineering & Medicine
  • Virginia AeroSpace Business Association (VASBA)
  • Virginia Aeronautical Historical Society (VAHS)
  • Virginia Space
  • Virginia Space Grant Consortium
  • Washington Airports Task Force

There will be more news forthcoming. In the meantime if you need anything from your VABA or have questions please feel free to call me at (804)228-4505 or email me at boakey@thevaba.org.


LEGISLATIVE ALERT


February 2, 2017


House Bill (HB) 1738, a bill creating a sales tax exemption on aviation parts used for the maintenance of aircraft services and maintained in Virginia passed House Finance Committee yesterday on a vote of 21 to 1.  The measure now goes before the full House of Delegates to be heard tomorrow, February 3rd. 


Call to Action Creating a tax exemption of this nature during declining revenues is difficult for legislators to support. It is critical that your Delegate hear from you that you support HB 1738.


Please call and email your Delegate today. Ask him/her to support Delegate Richard Anderson’s HB 1738, a retail sales and use tax exemption for aviation parts, engines and supplies.

Talking Points for email or phone conversation:


Virginia Is Not Competitive with Neighboring States

Many states neighboring Virginia already exempt general aviation repair parts and maintenance from state sales tax. Since aircraft are mobile assets with significant repair and maintenance costs, Virginia based aircraft owners have a strong incentive to take their business outside of the state. These examples describe tax policy in neighboring states:

  • Georgia: Repair parts installed on aircraft not registered in Georgia are exempt from sales tax.
  • New York: Repair parts and maintenance services are exempt from sales tax.
  • Pennsylvania: All sales of aircraft parts or services are exempt from sales tax.
  • South Carolina: Parts and supplies used in repair of aircraft are exempt from sales tax.
  • Tennessee: Parts for use in the repair of an aircraft that is 12,500 pounds or greater are exempt from sales tax.

Both West Virginia and Maryland are expected to pass similar legislation during their 2017 legislative sessions.

  • 28 states nationally have enacted aviation parts tax exemptions similar to what we propose. Six more have a partial exemption with caps on the amount of sales tax exempt.  Other states are exempting real property tax on aircraft to encourage those aircraft to be located within those states.

General Aviation Creates Jobs and Economic Activity
According to a recent study by PwC, GA supports 17,500 jobs in Virginia, generating $1.05 billion in labor impact. While this represents a significant economic impact, keeping Virginia aircraft in Virginia to be maintained will more than double the existing business in Virginia creating an almost immediate net gain in jobs and capital investment as already experienced in other states implementing this tax exemption.

Aircraft are Leaving Virginia for Repair/Maintenance

  • Currently, there are no major maintenance, repair and overhaul (MRO) facilities in Virginia to support complex business and GA aircraft, which means these aircraft are traveling to facilities outside of the state.
  • Based on a survey of NBAA Virginia members, 100% of respondents indicated they traveled outside of Virginia for repair/maintenance and spent an average of $100,000-$150,000 per event. In addition, 100% of the respondents indicated that if a qualified MRO was located in Virginia, they would consider utilizing that facility. 
  • Tell your Delegate that today hundreds of millions of dollars in general aviation aircraft maintenance work is exported to surrounding states.
  • Advise him/her that the State sends its own King Air 350s to Illinois for maintenance.
  • Tell your Delegate that without this sales and service tax exemption your business is just not competitive for the larger projects going everywhere else but here.
  • Tell your Delegate that HB1738 will go a long way to stop the exporting of general aviation maintenance work to other states keeping Virginia aircraft in Virginia to be maintained by Virginia businesses.
  • Tell your Delegate that HB1738 will help your business grow, create new jobs and create capital investment.

To determine who your Delegate is go to this link and enter your home address. Your state Delegate and Senator’s name will come up with their Capitol phone number and a link to send them an email.  Please call and email advising that you live in their district and you are asking them to support Delegate Richard Anderson’s HB 1738. Tell them that HB 1738 will keep your job secure while helping your business to grow in Virginia.
Finally, if your Delegate is Delegate Anderson, Knight or Marshall, thank them for taking the lead to promote Virginia aviation.  Without these three General Aviation would not be rising in prominence in Virginia.

For more information contact:  VABA Executive Director Bud Oakey at (804) 228-4505 or email him at boakey@thevaba.org.

Thank you for your continuous support of aviation in the Commonwealth.

Respectfully,

 

Bud Oakey 
VABA


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