CARSON CITY — Nevada is poised to “take off” as a major player in the aviation industry and could reap near immediate economic benefits by enacting aviation tax abatements, a transportation economist said Thursday.
“There are almost no other places in the world I have made such a glowing report,” Michael Tretheway, chief economist at Wisconsin-based InterVistas, told a joint meeting of the Assembly Taxation and Senate Revenue committees.
His presentation was a prelude to a hearing on Senate Bill 93, which would authorize partial sales and property tax abatements for companies that own, operate, manufacture, service, test or assemble aircraft or aircraft components.
“Aviation is a very footloose industry,” Tretheway said. “It will go wherever the costs are less.”
Nevada is one of only five states in the continental United States and the only one in the West that does not offer aviation tax incentives.
“Your state is surrounded completely by states that do,” Tretheway said.
Steve Hill, executive director of the governor’s economic development office, said that unlike surrounding states, Nevada charges full sales tax on aviation parts.
“Parts can be exceptionally expensive,” he said. “This is enough to completely in and of itself to drive decisions of airplane owners.”
Only essential repairs and maintenance work is done in Nevada, he said.
“This bill will allow us to be more competitive,” Hill said.
He noted helicopter tours that operate out of Las Vegas frequently fly their aircraft to Arizona for maintenance because of the cost differences.
General aviation in Nevada employs about 4,647 full-time workers, who earn an average annual salary of $53,000 — about 25 percent above the statewide average, Tretheway said.
Tax abatements would bring an almost immediate boost in the jobs and economic benefits, officials said, because the industry already has a solid footprint in the state.
“This is not a case where several years are needed for benefits to be realized while efforts are made to attract firms to establish new business,” Tretheway said.
Tretheway estimated up to 1,300 jobs could be realized within the first year; and up to 3,000 within five years.
“Aviation businesses are already established in Nevada,” he said. “They are competing nationally … and currently losing business due to tax rates.”
Job growth would likely be concentrated in Southern Nevada because of the existing presence of air tour operators, aviation repair stations and large volume of business aircraft, the report said.
Even with abatements, the state would see a benefit in tax revenue because of the increased aviation activity, economic development officials said.
Using criteria contained in a similar bill that failed in the 2013 legislative session, the economist estimated the abatements totaling $665,000 in the first year would be offset by $1 million in increased tax revenue.
Those projections do not take into account Nevada’s burgeoning unmanned aerial vehicle industry.