JLARC staff separately reviewed a sales and use tax exemption for commuter air carriers that purchase and repair airplanes used primarily for in-state travel. The 2019 review can be found here.
Inferred public policy objectives
The Legislature did not state a public policy objective when it passed this preference in 2013. JLARC staff infer two public policy objectives based on testimony to the Legislature.
Objectives (Inferred) | Results |
---|---|
1. Streamline and simplify tax reporting for qualifying commuter air carriers. | Met. The preference is streamlining and simplifying tax reporting for one beneficiary and the Department of Revenue. |
2. Provide an alternative to property tax for certain commuter air carriers if they pay an aircraft excise tax that is similar to the amount they would have paid in property tax. | No longer met. JLARC staff estimate the one qualifying commuter air carrier pays between 50% to 63% less in excise tax than it would have paid in property tax. |
Recommendations
Legislative Auditor's Recommendation: Modify
The preference is meeting one of two inferred objectives. While it is simplifying reporting for one taxpayer and the Department of Revenue, it is not providing an alternative to property tax that results in a similar amount of tax paid.
The Legislature should modify the preference to:
- Provide a method to equalize commuter air carrier excise tax fees on airplanes with property taxes over time.
- Clarify why the preference is limited to commuter air carriers primarily located on private property.
- Provide a performance statement with stated objectives and metrics to determine if objectives are met.
More information is available on the Recommendations Tab.
Commissioners' Recommendation
Available October 2019.