The Seven Percent Solution

Aviation got a boost, and I almost missed it. Buried amid the morning hog futures, my local radio station reported that Iowa’s governor, Kim Reynolds (not a pilot), signed a bill eliminating the 7 percent sales tax on airplane parts and labor. While encouraging, there was no mention if aircraft other than airplanes were included in this relief package, an oversight that should be rectified in a rectifying ceremony at this summer’s State Fair Butter Cow Fry. Eliminating sales tax on flight instruction was not included and likely won’t be, since instructors lack the political muscle A&Ps display, wielding Snap-On breaker bars. Inherent unfairness aside, here’s how this goose to GA’s bottom line works, assuming anyone notices.

Imagine a Bonanza owner in Cresco, Iowa (birthplace of Ellen Church, the first flight attendant) buys a $100 part. Quit giggling and pretend it’s 1957 and there exists an airplane part for under a thousand bucks. Prior to July 1, 2022, the Iowa retailer added $7 for sales tax, about the price of a pint of avgas or a Starbucks Molto Piccolo Espresso. Sales tax elimination will motivate Bonanza owners to exclaim, “With prices this low, I’ll take two!” Aviation booms, even as crypto markets crumble, and Elon Musk teleports to Mars. But savings won’t just affect Iowagean pilots.

Minimally lower prices could motivate airplane owners from states mired in tax bogs to schedule maintenance in Iowa and not simply because that’s where your Continental stuck a valve on a fuel stop at Burlington airport (KBRL). Side note: Burlington, Iowa, is the birthplace of William Frawley, home of Snake Alley (don’t ask), and shooting location for the 2010 award-winning feature film—I’m not making this up—"Splatter! Love, Honor, and Paintball." Catch the trailer here but only after you’ve finished reading about sales tax relief. And while awaiting installation of your tax-free parts, fire up ForeFlight to watch airplanes that used to fly to tax-haven states surrounding Iowa return for home field advantage.

Sales tax lags as an Oshkosh conversation starter. Pilots pay with little comment, but for mechanics and CFIs forced to collect, file and remit, it’s a nuisance. I’m a flight instructor who doesn’t instruct much after an inconvenient heart attack four years ago. I’m fine and, as revealed last week, I just got a special issuance medical. Time was, I’d fly with a student (charging 7 percent extra to call them “learners”) in airplanes built when "Leave It To Beaver" was still in development. A typical lesson included 30 minutes getting the intercom to work while unsnarling headset wires from rudder pedals. After we’d land, the client paid for airplane rental and me for learnin’ them good with both transactions glazed in the 7 percent toll.

Quarterly, whether I’ve collected taxes or not, the Department of What’s Yours Is Ours sends me a reminder, stating I’d once again failed to file my sales tax return and must include a late penalty, even if I had zero receipts. Instructors (learners?) are involuntary tax collectors, a responsibility not emphasized in my training. Nowhere on my CFI checkride did the examiner spring an emergency tax scenario on me. “Engine’s runnin’ rough, the student’s P&P (pale and puking), and the tax filing date is behind you. Demonstrate your CFI stuff and air-file for an extension.” Tip: Automatic fail if you turn back to the deadline behind you.

The sales tax I collect isn’t mine, although I spend it. It’s the client’s money passing through instructors’ hands, leaving no discernible benefit to the hapless collector. Picture Sonny Corleone at the tollbooth. (Tip of the hat to the late Mr. Caan.) Like death, the toll/tax is unavoidable. Sonny, a responsible citizen who’s late in filing, stops to pay the faceless collector, who drops the money into unseen coffers. Any interruption of the smooth sales tax flow unleashes severe consequences. As Sonny learned.

When promoting any legislation, politicians invoke their favorite four-letter word: Jobs. And, as the radio had reported, jobs “will spur enrollment at community colleges (that) offer aircraft maintenance courses,” leading to FAA certification and even more jobs. It’s a perpetual motion fantasy machine. Overnight, every Iowa kid will be an A&P mechanic, earning more than the cardiologist who replumbed my heart in time to make her next Mirage payment. Currently, Iowa has three colleges offering aviation maintenance training and two more planning to tap the windfall that arises from not having taxes, before the frenzy to produce more mechanics goes bust.

Segue To Seemingly Unrelated Rant

Recently while in my Citabria, the CTAF (122.9) was awash in stepped-on position reports. Further muddying the frequency, a Skylane pilot, with a radio capable of reaching Cape Horn, announced every position in the traffic pattern at a nearby airport. After “…on short final,” he added, “Last call.”  Obviously, he wasn’t an AVweb reader because we’ve excoriated this dumb phrase in previous screeds. I checked myself reaching for the mic button, knowing the futility of comment. But the Skylane pilot jabbed one more burr under my donut cushion by announcing, “Clear of runway” and restated the vacuous, “Last call.”

No, Mr. Skylane Pilot! You don’t get two last calls! Ask any bartender.

But as idiotic as that phraseology was, it did spark a solution to short-term loss of sales tax income. The 7 percent cut will put me ahead on labor and parts. Way ahead. According to aforementioned news report, the nonpartisan “Legislative Services Agency estimates Iowans who own airplanes will save $10 million a year from this tax break.” Impressive. I own two airplanes, so I’ll glean $20 million dollars per year, enough to sooth my fragile CFI ego and partially offset avgas prices. Frankly, I doubt the state can afford slathering millions on airplane owners indefinitely, so I expect sales taxes to reemerge with inflated vigor. But here’s a revenue-enhancing proposal: What if sales tax only applied to pilots who say “last call” on CTAF? That 7 percent solution won’t cure all GA woes, but it might keep one at bay.

Now you can watch "Splatter! Love, Honor, and Paintball" … and yes, I’m in it.