Assigned to APPROP                                                                                                             FOR COMMITTEE

 

 

 

 


ARIZONA STATE SENATE

Fifty-Fifth Legislature, Second Regular Session

 

FACT SHEET FOR h.b. 2646

 

aircraft taxation; fair market value

Purpose

Determines the average fair market value of an aircraft may not have an annual percentage change greater than the annual percentage change in the average consumer price index (CPI).

Background

An annual aircraft license tax is imposed on all aircraft based and registered in Arizona. The annual license tax is payable to the Arizona Department of Transportation (ADOT) on initial registration and annually by the last day of February. The aircraft license tax rate is 0.5 percent of the average fair market value of the particular make, model and year of the aircraft. The minimum annual license tax is $20 for the full year of registration (A.R.S. § 28-8335).

The Joint Legislative Budget Committee (JLBC) fiscal note estimates H.B. 2646 would reduce ongoing revenues by $1,900,000 in FY 2023. The state General Fund revenues would be reduced by $950,000 and the State Aviation Fund would be reduced by $665,000. The JLBC also estimates the bill would reduce one-time revenues by up to $1,900,000 in FY 2023 from credits for FY 2022 license tax collections (JLBC fiscal note).

Provisions

1.   Prohibits the average fair market value of an aircraft from having an annual percentage change that is more than the annual percentage change in the average CPI.

2.   Requires the average fair market value for FY 2022 to be benchmarked to what the average fair market value was in 2019.

3.   Requires ADOT, if a person pays an aircraft's annual license tax for FY 2022 before the general effective date and the average fair market value has an annual percentage change that is more than the average CPI using 2019 as a benchmark, to offer the person a credit to be applied toward the FY 2023 registration fees.

4.   Requires the credit to be the difference between the amount that the person paid based on the aircraft's actual average fair market value and the amount the person would have paid based on the aircraft's CPI adjusted fair market value.

5.   Makes technical and conforming changes.

6.   Becomes effective on the general effective date.

 

House Action

WM                 2/9/22        DP     5-3-0-2

3rd Read          2/23/22                 41-17-1-1

Prepared by Senate Research

March 4, 2022

LMM/sr