Governor Kim Reynolds has approved a tax break for the aircraft industry. The state sales tax on parts for planes and on the labor to maintain and repair aircraft will no longer be charged after July 1.
During House debate in April, Representative Lee Hein of Monticello said none of the states that surround Iowa charge the sales tax on parts and labor for planes.
“We have seen a lot of business go out of the state and this will help our local aircraft maintenance shops,” Hein said.
Bill backers said those job opportunities will spur enrollment at community colleges in Council Bluffs, Ottumwa and Waterloo that offer aircraft maintenance courses, so students can get FAA certification. Community colleges in Sioux City and Cedar Rapids plan to start aircraft maintenance programs. Representative Chris Hall of Sioux City said it will spur more activity at Iowa’s community airports.
“The more take-offs and touch-downs that you have from your runway, the better support long-term in federal support you will have for your airport,” Hall said.
One lawmaker who runs a global charity says he flew the non-profit’s plane out of state for maintenance, to save money on taxes. According to the Iowa Public Airports Association, at least 34 states do not charge sales taxes on airplane parts and labor. The Legislative Services Agency estimates Iowans who own planes will save $10 million a year from this tax break, which the governor signed into law yesterday.