The Washington state House of Representatives will consider a 10-year extension of tax exemptions for repairs and modification to large private airplanes owned by nonresidents after the Senate voted 47 to 1 in favor of Senate Bill 6068 on Feb. 18.
A policy enacted in 2013 exempted the sales of labor and services for the repair, cleaning and altering of qualified planes from the state’s sales and use tax. The policy also allows planes staying in the state for more than a year for the purpose of repair not to have to pay to register the planes with the state Department of Transportation.
A tax preference performance report conducted by legislative auditors determined that the tax exemption promotes economic development as it was intended to do. The report indicated that since the enactment of the exemption, nonresidents began bringing plane modification work to the state.
The bill’s prime sponsor, Sen. Judy Warnick, R-Moses Lake, said she can verify that the exemption does create good jobs in Moses Lake and other communities.
According to Keenan Konopaski, legislative auditor, the policy is reported to have had a net-positive effect on state revenues, as it created business and positive economic influence that would not exist without the incentive.
Dennis Weirich of Aviation Technical Services in Moses Lake, testified to the Senate Ways & Means Committee in support of the extension on Jan. 21. Weirich said there are very few companies that offer the advanced services that his team can offer.
“There are only four or five companies in the world that do what we do, and I like to think we do it better,” said Weirich. “These mechanics out there are the most skilled out there in the world.”
The report also found that the exemption had negligible impact on promoting growth on the broader aerospace manufacturing industry in the state, a goal that was outlined in the original implementation of the policy.
Weirich said Aviation Technical Services has 38 people employed and is preparing to bring on five more. He said the company offers good pay for the area, with health care and 401(k) benefits.
“It makes a difference to a lot of the folks in Moses Lake,” Weirich said.
The bill is scheduled for a hearing in the House Finance Committee on Feb. 25.
If not extended, the exemption will expire July 1, 2021.
