Implications of a Personal Property Tax Increase on Aircraft

“It’s just a penny,” a board supervisor stated during a vote proceeding on a personal property tax increase for aircraft.  The Loudoun County Virginia Board of Supervisors was seeking to increase the personal property tax rate on aircraft in their county this year from $.01/$100 of the appraised aircraft value to $.40/$100, a 4,000% increase.  However, after meeting with the Leesburg Airport Commission, local FBOs and NATA President James K. Coyne, the board pondered raising the tax by “just one penny.” 

What many on the board of supervisors didn’t realize is that a tax increase would mean loss of revenue for the county instead of gain.  While many local communities scramble to find ways to increase revenue, taxes on aircraft seem to be an easy target.  One of our many arguments against the tax increase is why further harm a struggling industry such as general aviation that has seen great losses in aircraft sales and decline in corporate and recreational flying.  Private aircraft does not equate to loads of cash!  Smart business owners and recreational pilots basing their aircraft in Loudoun County will not stay at an airport that raises taxes when they can easily move their mobile asset to another airport with a minimal or no tax rate.  Surrounding Loudoun County are five airports in Virginia with tax rates well below $.01.  Within 40 miles, there are five airports in Maryland and one airport in West Virginia that have no taxes at all, making Loudoun County the least competitive to date.

Local FBOs from nearby Dulles Airport (also in Loudoun County) made their case to the board of supervisors by stating that now especially is not the time to impose a tax increase when local FBOs who employ hundreds of people that support and service aircraft have been forced to reduce their staff.  A tax increase would have equated to the loss of many more jobs in the county.  Many businesses that base their aircraft at Dulles Airport would have pulled their aircraft out right away if the tax were increased, further harming the county’s budget by reducing revenue.

Luckily, the vote this week in Loudoun County on the measure was defeated unanimously.  But as counties throughout the country look for ways to bring in more revenue and consider instituting a similar tax increase, we can only hope the result is the same, based on the same facts that proved Loudoun County would ultimately not benefit from a tax increase on aircraft.  Economic development should be the focus for a county such as Loudoun County.  Attract new businesses by supporting your local airport.

By Kristen Moore, Director Legislative Affairs

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