Oppose SB1516 Tax Exemptions for Private Aviation Industry

I urge you to oppose Senate Bill 1516, scheduled for consideration in the Senate Finance Committee on Monday. This legislation, sponsored by Senator Tim Dunn, would create substantial new tax exemptions for the private aviation industry without a clear fiscal analysis or demonstrated public benefit. SB1516 establishes a mechanism where once $150 million in aggregate capital investments in aviation maintenance facilities is verified by the Arizona Commerce Authority, expanded tax exemptions automatically trigger. These exemptions would eliminate sales and use taxes on aircraft, navigational equipment, and maintenance supplies for general aviation aircraft operations. The bill removes the current limitation that restricts such exemptions to certificated carriers, opening the door to tax breaks for private jet owners and maintenance operations. A similar bill last year carried an estimated cost of millions of dollars to state revenues. Yet SB1516 moves forward without a cost estimate, making it impossible to assess the fiscal impact on Arizona's budget. This follows a troubling pattern. State tax carve-outs have ballooned from $16 billion in 2014 to nearly $30 billion in 2024, systematically eroding the revenue base needed to fund essential services. Arizona already struggles to adequately fund public education and critical services. Creating new tax exemptions for an industry serving primarily wealthy aircraft owners diverts resources from schools, infrastructure, and programs that benefit all Arizonans. The bill's structure particularly benefits private aviation interests while providing no guarantee of job creation or economic benefit proportional to the revenue loss. The conditional structure of SB1516 makes future fiscal planning difficult. Once the $150 million investment threshold is met, these exemptions activate automatically and remain in effect indefinitely, locking in revenue losses without legislative review of their effectiveness. I ask you to vote no on SB1516 in committee. Arizona cannot afford to further erode its tax base with exemptions that primarily benefit private jet owners while our schools and communities need investment.