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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
REVISED
aircraft registration fees; taxation; repeal
Purpose
Repeals the license tax and registration fee levied on aircrafts registered in Arizona.
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). Current statute also 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 the Arizona Department of Transportation (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 being repaired 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).
Provisions
1. Repeals the license tax and registration fee for an aircraft registered in Arizona.
2. Repeals sections of statute relating to the following:
a) an aircraft's registration fees and exemption claims;
b) the license tax rate for a nonresident's aircraft;
c) license tax rates of stored, repaired, salvaged, special, manufacturer's and maintenance aircrafts in Arizona; and
d) ADOT annually determining fair market value of aircrafts.
3. Removes the requirement that the Director of ADOT do the following upon receipt of a total loss affidavit:
a) determine the amount of registration fee and license tax;
b) reduce the amount of registration fee and license tax by one-twelfth for each full month of the registration period that has not yet expired; and
c) allow a tax credit to the owner for the appropriate amount of taxes previously paid on verified written application by the owner of the aircraft at the time the total loss occurred.
4. Removes the requirement that ADOT assess the registration fee and license tax prescribed if an aircraft dealer fails to register the aircraft with ADOT as an aircraft being held for purposes of sale on a form within 10 days after the aircraft is purchased.
5. Specifies that license tax and registration fees do not constitute a lien on an aircraft.
6. Makes technical and conforming changes.
7. Becomes effective on the general effective date.
Revisions
· Updates the fiscal impact statement.
Senate Action
TAT 2/8/21 DP 5-4-0
Prepared by Senate Research
February 10, 2021
ZD/SS/gs/kja