HB1478

To Amend The Sales And Use Tax Exemption For Commercial Jet Aircraft.

Failed

Last Action (May 1, 2023): Died in House Committee at Sine Die Adjournment

AI-Generated Summary

House Bill 1478 seeks to amend the existing Arkansas sales and use tax exemptions for parts and services related to commercial jet aircraft. The bill clarifies that parts or tangible personal property incorporated into commercial jet turbine engine aircraft components or subcomponents are exempt from certain taxes. It further redefines 'commercial jet turbine engine aircraft' to include commercial, military, or private turbine or turbo jet aircraft with a certified maximum take-off weight of 12,500 pounds or more, or aircraft operating under specific federal aviation regulations (14 C.F.R. Parts 135 and 137), or those used for business purposes. The bill aims to broaden or clarify the scope of qualifying aircraft and components eligible for this tax exemption. The provisions are set to take effect on the first day of the calendar quarter following the bill's enactment.

Potential Impact Analysis

Who Might Benefit?

The primary beneficiaries are aircraft owners, operators, and aviation maintenance companies in Arkansas that service jet aircraft with a take-off weight of 12,500 pounds or more, or those operating under specific federal commercial aviation certifications. By expanding or clarifying the tax exemption on parts and services, these businesses and entities will face reduced operational costs when performing maintenance or upgrades on their aircraft fleets.

Who Might Suffer?

The state and local governments of Arkansas are the primary entities negatively impacted, as the expansion or clarification of tax exemptions reduces the total sales and use tax revenue that would otherwise be collected from the purchase of aircraft parts and services. Additionally, if the tax revenue is earmarked for specific public funds, those funding pools may see a decrease in their total revenue streams.

Read Full Bill on arkleg.state.ar.us