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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
AMENDED
aircraft registration fees; taxation; repeal
Purpose
Repeals the requirement to register aircrafts with the Arizona Department of Transportation (ADOT) and relevant sections of statute relating to aircraft registration, including registration fees and license taxes. Appropriates $3,000,000 from the state General Fund to the State Aviation Fund in FY 2022 and every fiscal year thereafter.
Background
Current statute requires an aircraft to become registered within 60 days after the aircraft is brought into Arizona. Statute requires the issuance of a certificate and license decal after a registration fee of $5 is paid, and that the license decal be visibly displayed at all times on the aircraft (A.R.S. § 28-8325). Statute states that if an aircraft that is required to be registered is not registered within 60 days after its entry into Arizona or renewed annually on or before the last day of February, a penalty of $25 for the first month and $5 for each succeeding month of delinquency must be added to the registration fee and collected unless an exemption for the aircraft is established (A.R.S. § 28-8329). Statute prohibits ADOT from issuing a registration certificate for an aircraft to a person who is subject to use tax unless the applicable tax has been paid as shown by a receipt from the collecting officer (A.R.S. § 28-8322).
The annual license tax imposed on aircraft in Arizona is payable to ADOT on initial registration and annually on or before the last day of February, being no less than $20 for a full year of registration (A.R.S. § 28-8335). This same license tax is applied to aircrafts in storage or in repair and for an antique, classic, warbird, glider, experimental, homebuilt or balloon aircraft (A.R.S. §§ 28-8337 and 28-8339). Nonresident aircraft license tax includes a fee that is equal to one-tenth of one percent of the average fair market value of the particular make, model and year of aircraft if the aircraft is not engaged in any intrastate commercial activity (A.R.S. § 28-8336).
According to the Joint Legislative Budget Committee, based on FY 2020 revenue distributions, it is estimated that S.B. 1406 will decrease FY 2022 revenues by $8.3 million as follows: 1) $4.1 million from the state General Fund; 2) $2.9 million from the State Aviation Fund; and 3) $1.2 million from local governments (JLBC Fiscal Note). S.B. 1406 appropriates $3,000,000 from the state General Fund to the State Aviation Fund in FY 2022 and every fiscal year thereafter.
Provisions
1. Repeals the requirement that an aircraft be registered with ADOT.
2. Repeals sections of statute relating to:
a) aircraft registration fees;
b) license tax rates for various types of aircraft;
c) aircraft value determination;
d) aircraft registration fee and license tax exemptions;
e) penalties associated with aircraft registration and license tax; and
f) loss or destruction of aircrafts.
3. Appropriates $3,000,000 from the state General Fund to the State Aviation Fund in FY 2022 and every fiscal year thereafter.
4. Adds legislative appropriations as a funding source for the State Aviation Fund and removes registration fees, license taxes and penalties as a funding source.
5. Makes technical and conforming changes.
6. Becomes effective on the general effective date.
Amendment Adopted by Committee of the Whole
1. Repeals the requirement to register an aircraft with ADOT.
2. Repeals relevant sections of statute related to aircraft registration, including associated registration fees and license taxes.
3. Appropriates $3,000,000 from the state General Fund to the State Aviation Fund in FY 2022 and every fiscal year thereafter.
4. Adds legislative appropriations as a funding source for the State Aviation Fund.
5. Makes conforming changes.
Senate Action
TAT 2/8/21 DP 5-4-0
Prepared by Senate Research
March 10, 2021
ZD/SS/gs/kja