Tax break on plane parts to bring new aviation business, jobs to Virginia | Prince William

Virginia aviation advocates are trumpeting a new law backed by Del. Rich Anderson, R-51st District, as a major economic boon for the entire state, and Manassas specifically.

Earlier this year, the Prince William-area delegate was able to successfully shepherd through legislation that will exempt aircraft engines and other plane maintenance supplies from the state sales tax for at least the next few years. It may seem like merely a technical change, but representatives of Virginia’s aviation industry joined Anderson at the Manassas Regional Airport on Aug. 14 to hail the new law as a potentially transformative measure for the state’s economy.

“This levels the playing field with the states around us,” Anderson told reporters. “Our aviation industry in Virginia is going be impacted exponentially by this.”

Indeed, Bud Oakey — the executive director of the Virginia Aviation Business Association — says three dozen other states have already adopted similar tax exemptions for aircraft equipment, including most of Virginia’s neighbors. For big Virginia corporations with a fleet of planes like Altria or Dominion Energy, Oakey says tax bills for just routine maintenance became so cost prohibitive in the state that they simply flew planes elsewhere to get work done.

But he expects Anderson’s legislation will turn things around in that department, projecting that the state will make up any money in lost tax revenue within the first year the exemption takes effect.

“This is maintenance work that could be done in Virginia, but right now it’s being done in Appleton, Wisconsin,” Oakey said. “We’re a two-hour flight from just about anywhere on the east coast. We can bring businesses right to Richmond, right to Lynchburg or right here to Manassas.”

Oakey says he’s heard plenty of examples in past months of business owners scheduling maintenance work at the Manassas airport, only to balk at the taxes associated with buying the necessary equipment. But when this new law takes effect next year, he foresees that dynamic changing, opening up the potential for a hiring surge among aircraft maintenance companies.

“We have great aviation schools in Virginia, but less than 5 percent of graduates stay in state for work,” Oakey said. “The jobs just aren’t there, but they will stay at home if we create them.”

Marion Dobbs, the executive director of the Manassas campus of the Aviation Institute of Maintenance, is hoping that many of her students will prove to be the beneficiaries of any boom in business generated by the new law. She’s already started forming ties with Manassas city schools to bring more local students into her program, and she envisions someday placing her graduates into jobs just down the road from the campus at the Manassas airport.

“We’ll be able to allow our graduates to stay here with their family and friends, and not leave this community when they want to find a job,” Dobbs said.

For a law so widely hailed by people in the industry, Anderson admits that it was still “a challenge” to get it off the ground in Richmond.

He notes that the legislation nearly didn’t make it out of a General Assembly subcommittee, but Oakey’s group did plenty of lobbying to give it a boost. He expects the state’s budget deficit had a lot to do with the bill’s early resistance, but lawmakers eventually agreed to hold off on the tax exemption taking effect until July 1, 2018 as a compromise to move it ahead.

From there, Anderson notes that it received bipartisan support and faced little resistance — it passed the House of Delegates 91-5 and cleared the Senate unanimously.

The tax exemption is set to expire in 2022, giving lawmakers a chance to review whether the change has had the sort of effect on the state’s economy that all involved are envisioning, but Anderson is very bullish on the new law’s future.

“We’re expecting a big upturn in new business, and the retention of old businesses,” Anderson said. “It was just readily apparent that we needed this.”

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