HomeMy WebLinkAboutK. Kaspari - IPAA - 2/4/2020 FINANCE DEPT. STAFF ONLY
LINE ITEM USED
TRAVEL REQUEST FY _BUDGETED
CITY OF WATERLOO EXPENDED YTD
THIS REQUEST
LEFT AFTER THIS
REQUEST
DATE
Original-Clerk/Finance Co -Department
NAME(S) AND POSITION(S): DATE:
Keith Kaspan, Airport Director January 31, 2020
NAME OF CLASS I MEETING: DESTINATION:
1. Meeting of the Executive Board of the Iowa Public Des Moines- State Capital Building
Airport Association (IPAA); and, DEPARTURE POINT
2. Discuss IPAA Priorities with Iowa Le islators IF NOT WATERLOO:
DEPARTURE DATE: RETURN DATE: DATE(S) OF MEETING:
Tuesday, February 4, 2020 Tuesday, February 4,2020 Tuesday, February 4, 2020
PURPOSE OF TRAVEL:
House Ways & Means Committee Members are meeting on Thursday the 6`h regarding this request for Tax Parity
Regarding House File No: 607- Sales Tax Exemption for Iowa Aircraft Maintainers for Sales Tax Exemption on Aircraft
Parts and Labor. IPAA Members need to get in front of them on Tuesday to ask for their consideration to make this
exemption happen. Keith will be back in time for City Council meeting scheduled for later that afternoon.
WILL TRAVEL REQUIRE ADDITIONAL PERSONNEL: X COST$
YES NO
METHOD OF TRAVEL:
X CITY VEHICLE X PRIVATE VEHICLE
N/A AIRFARE DEPARTING FROM: Waterloo Regional Airport
ESTIMATE OF COST: BUDGET LINE ITEM:
$0.00 LODGING $0.00 TAXI X GRANT REIMBURSABLE
$0.00 MEALS $0.00 PARKING YES NO
$0.00 REGISTRATION $0.00 AIRFARE X REQUIRED CERTIFICATION
$0.00 MILEAGEIFUEL $0.00 MISCITOLLS YES NO
TOTAL FOR ALL: $ $0.00 TOTAL: $ 0.00 PER PERSON
I BALIEVHISERVES A PUBLIC PURPOSE I APPROVE THIS TRAVEL REQUEST
AN AND BENEFICIAL TO THE
CIT
DEPA TMENT MAYOR
January 31, 202dr
DATE DATE
K:\Shared Goodies\Forms\Travel Request Form January 2010
IOWA TAX
PARITY
Iowa Has:
-40"ns
99 General 3,863 Based aircraft 3,588 AOPA members 36 Maintenance
aviation airports facilities
GENERAL AVIATION AIRPORTS CONTRIBUTE $187 MILLION ANNUALLY TO THE
STATE`S ECONOMY, INCLUDING 2257 JOBS AND A PAYROLL OF OVER $72M.
The difference in part price is small, Avionics Replacement
but the perception on the tax is huge!
Pilots can easily reach repair shops
in Nebraska, Minnesota, Wisconsin, Date:Receipt
Illinois, and Missouri and not pay sales
tax on repair parts or laborIn •
Protect Iowa Jobs. Promote Iowa Aviation. In Wisconsin
Support Iowa Businesses. Parts & Labor •
MissouriIn $16,995.00
Parts & Labor
AOPA
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A MEMBERSHIP ORGANIZATION
REPRESENTING THE INTEREST OF ALL
,< <
IPAA PUBLIC USE AIRPORTS IN IOWA
Iowa Public Airports Association
Iowa Lost Work/Employment
Support
Sales Tax Exemption for Aircraft Parts and Labor
House File 607 (formerly HSB 126)
Background
Iowa's sales tax policy is negatively impacting aviation employment. Thirty-four states have a sales tax
exemption for aircraft parts and labor and two states have legislation proposed to exempt aircraft parts and
labor.
Iowa Aviation Employers and Lost Work
Elliott Aviation, Des Moines, estimated that this past fiscal year they lost $3 million - $4 million in sales as a
direct result of Iowa's aviation tax policy.
Des Moines Flying Service estimated that this past fiscal year they lost $800,00041 million in sales as a
direct result of Iowa's aviation tax policy. In 2018, Des Moines Flying Service estimated their loss at $1.75
million in parts and at least $140,000 in labor sales, the equivalent of one full-time technician.
Jet Air Inc., Iowa City, because of the Illinois tax savings for aircraft services, Jet Air invested and sent
maintenance technicians to avionics training at their Illinois location and not their Iowa City location. As a
result, nearly $1 million in avionics and other related work was completed in their Illinois facility and not in Iowa.
Jet Air sent two aircraft to a maintenance provider in Missouri for avionics work that were overflow from their
Illinois shop. Missouri has the aircraft parts/labor sales tax exemption.
Lindner Aviation, Keokuk, reports a customer moved his engine update work to Missouri, due to Iowa's tax
on a $42,000 project. Lindner Aviation also reports, "numerous customers" purchase engine parts from tax
exempt states and ship them to Lindner Aviation for installation.
Leading Edge Aviation, Spencer, reports losing specialized service work on Beechcraft Bonanza aircraft.
The lost work is directly attributed to Iowa's 7 percent tax on this 300-hour labor project. The service work has
gone to tax-friendly states.
Spencer Avionics and CAMM Air, Spencer, provide aviation services to customers of a radius of more than
300 nautical miles to our community. Much of the work quoted is for avionics installation, inspection and/or
repair work. CAMM Air struggles to be competitive due to the additional 7 percent Iowa tax. These customers
travel a few hundred miles for these needed services. Competition for the work is price sensitive. Decisions are
made based on which maintenance shop has is the best price and Iowa business are at an immediate 7
percent cost disadvantage.
Bottom Line - Aviation is a mobile industry and state sales tax matters greatly when it comes to
where aircraft owners choose to have repair projects done. With Wisconsin, Illinois, Missouri, Kansas,
Nebraska and Minnesota all tax free, it is easy to fly an additional 100 miles to go across the state
border and avoid paying the added 7 percent tax.
1255 SW Prairie Trail Parkway. Ankeny. IA. 50023. 515-727-0667. www.iowaairports.org
A MEMBERSHIP ORGANIZATION
REPRESENTING THE INTEREST OF ALL
IPAA PUBLIC USE AIRPORTS IN IOWA
Iowa Public Airports Association
IPAA State Legislative Priorities 2020
Airport Infrastructure Reinvestment for Iowa (AIR-Iowa)
According to the State Aviation System Plan (2010-2030) Iowa's aviation system need is $816M or $43M per
year. From commercial passengers, to commercial freight, and our corporate and general aviation communities,
Iowa's system of airports needs significant investment if Iowa is to remain competitive in today's global
marketplace.
The State of Iowa's current allocation for airport vertical infrastructure is $2.9M dollars per year leaving an
unfunded gap of$40.1M annually. The Iowa Public Airports Association respectfully requests an increased
budget commitment to STRENGTHEN Iowa's airport system by making a 10-year allocation of Rebuild
Iowa Infrastructure Funds (RIIF) in the amount of $16.5M per year, for a total of$165M toward airport
vertical infrastructure. The investment would be derived entirely from Iowa's RIIF program, but grants
awarded would require a five percent local match by the Airport Owner.
Proaram Hiahliahts
1. IPAA fully supports an aviation system investment approach;
2. All 99 counties would see an increase in infrastructure investment at their airports;
3. As proposed, Iowa's annual investment in general aviation airport vertical infrastructure would
increase to $3.OM;
4. As proposed, Iowa's annual investment in commercial service airport vertical infrastructure would
increase to $13.5M; and,
5. All funds dispersed would require a 5 percent local match by the Airport Owner.
Proaram Details
1. Commercial Service Airports:
A total of $13.51VI allocated to Commercial Service Airports each year or $135M over a 10-year period.
To be eligible, a facility would have to meet the federal definition of a Commercial Service Airport. Funds
would be allocated as follows:
• Each of the eight Commercial Service Airports would receive $300,000; and,
• Remaining funds would be dispersed and/or allocated based upon the percentage of passenger
enplanements, similar to the current FAA entitlement funding formula for grants issued under the
Airport Improvement Program (AIP)
2. General Aviation Airports:
A total of $3.01VI allocated to General Aviation Airports each year or $30M over a 10-year period. The
funds would be allocated according to the current project priority rating system as administered by Iowa's
Department of Transportation via the Office of Aviation.
Keep Iowa Aviation Employers Competitive
Support House File 607 (formerly House Study Bill 126), Sales Tax Exemption for Aircraft Parts and Labor
Background
• Aviation in Iowa is responsible for 16,549 jobs with a payroll of$587 million dollars.
• Five of Iowa's neighboring states (IL, MN, MO, NE,WI) have a sales tax exemption of aircraft parts and labor.
Only SD does not.
• One of the criterion for evaluating facility growth and investment in aviation facilities is the presence of a
State sales tax exemption on aircraft parts and labor.
• Neighboring states with the tax exemption enjoy considerably more robust aerospace economic
development.
• Indian Hills Community College and Iowa Western Community College are leaders in aircraft maintenance
degrees. Such an exemption would help grow local jobs and potentially keep more of our young people who
are educated in Iowa, staying in Iowa.
Issue Statement
• Thirty-Four States have the sales tax exemption and two are currently considering placing Iowa employers
at a competitive disadvantage.
• This bill is about helping Iowa employers offer competitive pricing to rival prices offered by out-of-state
companies, an especially important consideration when planes are, by definition, very portable.
• This is NOT a tax break for aviation companies because sales taxes are passed onto the customer.
• Sales tax is shown as a separate invoice line item paid for by the customer, not the service provider.
• Current Iowa Statute limits the parts and labor exemption to "air carrier" only, thereby, excluding many of
Iowa's aerospace employers.
• Non-competitive tax laws drive repair work and subsequent revenue to neighboring states.
Bottom Line
Aviation is a mobile industry and state sales tax matters when it comes to where aircraft owners choose to have
their repair projects done. With Wisconsin, Illinois, Missouri, Kansas, Nebraska and Minnesota all tax free, it is easy
to fly an additional 100 miles to go across the state border and not pay the added 7 percent tax.
Keith Kaspari
From: Marty Lenss <M.Lenss@flycid.com>
Sent: Thursday,January 30, 2020 10:22 AM
To: selliott@elliottaviation.com; Spencer Airport; Matt Wolfard (mattw@jetairinc.com);
'David Sims'; Keith Kaspari; Don Jay; William Kyle (bill@northiowaair.com); Greg Gobble
Cc: Gary Grant (gary@grantconsultingllc.com);Jim Obradovich
Subject: RE: HF 607 - Sales Tax Exemption (Response Needed)
Attachments: Iowa Lost Mx Work_October 2019_final.pdf,Iowa_Party_OnePager v 2.0.pdf;IPAA 2020
_Legis Priorities_final.pdf
Importance: High
Good morning-
We are on for February 4 to work the halls of the Capitol in promotion of HF 607. Details below;
1. Date—Tuesday, February 4
2. Time—9:00 a.m.— 12:00 p.m.
3. Location—meet (at 9:00 a.m.) in the cafeteria (basement) of the Capitol
4. We will meet that morning to assign everyone legislators to speak with and plan to debrief as a group
around 11:00 a.m.
5. Attached are the various talking points we have been using.
Please RSVP to me so I know how many can make it. We really need as many of you as we can get.
Call if you have any questions. My cell is 507-696-3446.
Thankyou
Marty
From: Marty Lenss
Sent:Tuesday,January 28, 2020 10:29 AM
To: 'selliott@elliottaviation.com' <selliott@elliottaviation.com>; Spencer Airport<spencerairport@smunet.net>; Matt
Wolfard (mattw@ietairinc.com) <mattw@ietairinc.com>; 'David Sims' <dsims@masoncity.net>; Keith Kaspari
<Keith.Kaspari @waterloo-ia.org>; Don Jay<diay@dmfs.com>
Subject:HF 607-Sales Tax Exemption (Response Needed)
Importance: High
Greetings—
I am trying to organize a day at the Capitol for a small group of us to help push sales tax exemption.
Right now I am looking at the morning of February 4.
Will this date woflc fQryo"a44?
Thankyou
i
Marty
Marty Lenssl Airport Director
Eastern Iowa A€rp :-. 'lID)
2515 Arthur Collins Fkvvy SW
Cedar Rapids, IA 52404
Office: 319.731.5719
Fax: 319.362.1670
2
House File 607 - Introduced
HOUSE FILE 607
BY COMMITTEE ON WAYS AND MEANS
( SUCCESSOR TO HSB 126)
A BILL FOR
1 An Act modifying the sales and use tax exemption for the sale
2 of certain component parts attached to or services performed
3 on aircraft.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
TLSB 2238HV (1) 88
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H.F. 607
1 Section 1. Section 423 .3, subsections 74 and 76, Code 2019,
2 are amended to read as follows:
3 74. The sales price from the sale or rental of aircraft for
4 use in a scheduled interstate federal aviation administration
5 certificated air carrier operation.
6 76. The sales price from the sale or rental of tangible
7 personal property permanently affixed or attached as a
8 component part of the aircraft, including but not limited
9 to repair or replacement materials or parts; and the sales
10 price of all services used for aircraft repair , remodeling,
11 and maintenance services when such services are performed on
12 aircraft, aircraft engines, or aircraft component materials or
13 parts. For the purposes of this exemption, aircraft" means
14 airera€t used in nensehedeled interstate €edar-al—aviateft
15
16 under 14 G.F.H. eh. 1, pt . the same as defined in section
17 328.1.
18 Sec. 2. Section 423 . 3, subsection 75, Code 2019, is amended
19 by striking the subsection.
20 EXPLANATION
21 The inclusion of this explanation does not constitute agreement with
22 the explanations substance by the members of the general assembly.
23 Current law exempts from the Iowa sales and use tax the
24 sale, rental, or use of aircraft component parts permanently
25 attached to an aircraft, including repair or replacement
26 materials or parts, and repair, remodeling, and maintenance
27 services used on an aircraft, aircraft engine, or aircraft
28 component materials or parts, provided the aircraft is used
29 in either a scheduled or nonscheduled interstate federal
30 aviation administration (FAA) certified air carrier operation
31 (scheduled or nonscheduled FAA operation) . This bill removes
32 the requirement that the aircraft be used in a scheduled or
33 nonscheduled FAA operation to qualify for the exemption. The
34 sale, rental, or use of the component parts and services
35 described above will be exempt from the sales and use tax
LSB 2238HV (1) 88
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H.F. 607
1 when permanently attached to or performed on any aircraft.
2 The bill defines "aircraft" to mean the same as it does for
3 purposes of Code chapter 328 (aeronautics) , which includes any
4 contrivance now known, or hereafter invented, used or designed
5 for navigation of or flight in the air, for the purpose of
6 transporting persons or property, or both.
7 The bill also makes nonsubstantive changes to Code sections
8 423 . 3(74) and 423 .3 (75) to strike or move similar language
9 relating to the sales and use tax exemption described in the
10 bill and to the sales and use tax exemption for the sale or
11 rental of aircraft used in a scheduled FAA operation.
LSB 2238HV (1) 88
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