Aerospace FAR Repair Stations

From the 2024 DOR Tax Exemption Study

82.04.250(3) - Certified aircraft repair firms Description Qualified aircraft repair facilities certified by the Federal Aviation Administration as a “FAR Part 145” repair facility receive a reduced B&O tax rate of 0.2904%. Without the preferential rate, these businesses would be subject to the 0.484% rate applicable to the retailing of interstate transportation equipment. The preferred B&O tax rate expires July 1, 2040. Purpose To encourage the airplane repair industry in Washington. Taxpayer ($ in millions): savings FY 2024 FY 2025 FY 2026 FY 2027 State Taxes $0.580 $0.600 $0.600 $0.610 Local Taxes $0.000 $0.000 $0.000 $0.000 Repeal of Repealing this preferential rate would increase revenues. exemption Potential ($ in millions): revenue gains FY 2024 FY 2025 FY 2026 FY 2027 from full repeal State Taxes $0.000 $0.550 $0.600 $0.610 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 2025. - Growth rate mirrors the industrial production index for aerospace products and parts growth rate reflected in the March 2023 S&P Global Market Intelligence forecast. Data Sources - Department of Revenue,