Senate Bill Report SB 5350 — Aerospace Tax Preferences for Unmanned Aircraft Systems (As of February 1, 2021)
Summary
Senate Bill Report SB 5350 as of February 1, 2021, for the Senate Committee on Business, Financial Services & Trade, on an act relating to extending certain aerospace tax preferences to include unmanned aircraft systems. Sponsor is Senator Honeyford. The background states that a 2019 Aerospace Tax Preferences Review by the Joint Legislative Audit and Review Committee found aggregate estimated biennial beneficiary savings of approximately $569 million in the 2021-23 biennium. Beginning October 1, 2021, the definition of commercial airplane is modified to include commercial unmanned aircraft system, which the report describes as a Federal Aviation Administration certified aircraft. The appropriation is listed as None, and the bill takes effect on October 1, 2021.
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- Issuer
- Congressional materials
- Document type
- Report
- Date
- 2021-02-02
- Case
- 2021 02 02 A28432 D226545 Bill Report 5350 Sba Bfst 21
Cite this document
“Senate Bill Report SB 5350 — Aerospace Tax Preferences for Unmanned Aircraft Systems (As of February 1, 2021).”
Original at app.leg.wa.gov, dated 2021-02-02. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2021-02-02-2021-02-02-a28432-d226545-bill-report-5350-sba-bfst-21/
, SHA-256 d4a058535b83ffa9483c214678a269816d02a25afd265bf3c0390413c9a51517.Full text
SENATE BILL REPORT
SB 5350
As of February 1, 2021
Title: An act relating to extending certain aerospace tax preferences to include unmanned
aircraft systems.
Brief Description: Extending certain aerospace tax preferences to include unmanned aircraft
systems.
Sponsors: Senator Honeyford.
Brief History:
Committee Activity: Business, Financial Services & Trade: 2/02/21.
Brief Summary of Bill
• Expands the definition of commercial airplane used in certain tax
preference statutes to include commercial unmanned aircraft systems
through July 1, 2022.
SENATE COMMITTEE ON BUSINESS, FINANCIAL SERVICES & TRADE
Staff: Clinton McCarthy (786-7319)
Background: The term "commercial airplane" is an airplane certified by the federal
aviation administration for transporting persons or property, and any military derivative of
such an airplane. The term is used in a variety of aerospace tax credits that were reviewed
by the Joint Legislative Audit and Review Committee as part of the 2019 Aerospace Tax
Preferences Review. The study found the aggregate estimated biennial beneficiary savings
of the aerospace tax preferences was approximately $569 million in the 2021-23 biennium.
The list of aerospace tax preferences that expire on July 1, 2040, in which the term
commercial airplane is used, is as follows:
• tax deductions related to commercial aircraft loan interest and fees;
• tax credits related to preproduction development expenditures;
This analysis was prepared by non-partisan legislative staff for the use of legislative
members in their deliberations. This analysis is not part of the legislation nor does it
constitute a statement of legislative intent.
Senate Bill Report -1- SB 5350
• tax credits for property and leasehold taxes paid on property used for manufacture of
airplanes;
• tax exemptions for computer parts and software related to the manufacture of
commercial airplanes; and
• tax exemptions for labor, services, and personal property related to the manufacture
of commercial airplanes.
In 2020, the Legislature eliminated the preferential business and occupation tax rate for the
manufacturing, wholesaling, and retailing of commercial airplanes, airplane components,
and tooling, effective April 1, 2020.
After March 31, 2021, a preferential rate of 0.357 percent could be implemented if the
following conditions are met:
• the United States and European Union reach an agreement resolving their World
Trade Organization disputes regarding large civil airplanes that expressly allows
preferential tax rates;
• the Department of Commerce notifies the Department of Revenue (DOR) in writing
that such agreement has been reached, and includes a copy of the notice to the
Department of Commerce from the United States trade representative regarding the
agreement; and
• the Department of Labor and Industries notifies DOR that a significant commercial
airplane manufacturer has at least a 0.3 percent aerospace apprenticeship utilization
rate of its qualified apprenticeable workforce.
Summary of Bill: Beginning October 1, 2021, the definition of commercial airplane is
modified to include "commercial unmanned aircraft system." A commercial unmanned
aircraft system is a Federal Aviation Administration certified aircraft designed to operate
autonomously or be piloted remotely without a pilot on board. This modification of the
definition of the term commercial airplane expires on July 1, 2032.
Appropriation: None.
Fiscal Note: Requested on January 25, 2021.
Creates Committee/Commission/Task Force that includes Legislative members: No.
Effective Date: The bill takes effect on October 1, 2021.
Senate Bill Report -2- SB 5350
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- Original
- app.leg.wa.gov