Commercial aircraft loan interest and fees

From the 2024 DOR Tax Exemption Study

82.04.43391 - Commercial aircraft loan interest and fees Description This preference provides a B&O tax deduction to out-of-state financial institutions when they make loans to a Washington-based commercial airlines, who use the loan to purchase commercial airplanes. The out-of-state lenders may deduct B&O tax on the interest and fees they earn from the loans they provide from the measure of tax. The deduction authorized under this section is not available to any person who is physically present in Washington. Purpose To ensure the economic nexus provisions of 2010 legislation do not inadvertently apply to this activity and to retain the previous tax-exempt provisions of such interest and loan fees. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.969 $0.969 $0.969 $0.969 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this deduction will increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.888 $0.969 $0.969 Local Taxes $0.000 $0.000 $0.000 $0.000 Assumptions - This repeal takes effect July 1, 2024, and impacts 11 months of collections in fiscal year 2