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Bills give tax breaks to crop dusters, helicopter tours

Helicopter tour grand canyon

A Republican lawmaker has reintroduced legislation that was vetoed last year to exempt crop-dusters and charter aircraft operators from state sales taxes.

Gov. Doug Ducey vetoed the proposal last year over concerns a retroactivity clause could prompt a flood of refund requests.

Rep. T.J. Shope said he’s worked with the governor’s office on a pair of bills to grant the tax breaks. Both provisions are designed to counter Department of Revenue decisions saying taxes were owed.

The charter aircraft bill emerged last year after a major operator of Grand Canyon helicopter tours and companies it leased aircraft from lost a case at the Arizona Court of Appeals. Papillon Airways Inc. was ordered to pay nearly $700,000 plus interest in state transaction taxes for lease income and engines and other equipment it bought between 2003 and 2006.

The issue was combined with one excepting crop-dusting aircraft on one piece of legislation late in last year’s legislative session and sent to the governor. Ducey vetoed the bill but ordered the tax not to be collected from Papillon to give lawmakers time to fix the legislation this year. That order created a stir among some lawmakers.

The two issues are being proposed separately this session.

The crop-dusting exemption in House Bill 2133 is exactly the same version enacted last year, Shope said, and has a cap of $10,000 on refunds. He said he’s working to place a cap in the bill affected aircraft charter operators contained in this year’s House Bill 2533.

“We’re going to continue to work on that, because the governor’s office doesn’t want and I don’t want something like an alt-fuels fiasco or anything like that,” Shope said, referring to a 2000 tax credit law for clean-fuel vehicles that ballooned into a massive budget-busting boondoggle. “We want to make sure that there’s only a specific amount that people can go back to.”

Shope said both cases involve the Department of Revenue making decisions reversing long-standing tax policy practices.

“There was no change in the law here in the Legislature, it was a difference of interpretation,” Shope said.

The crop-dusting bill has been approved by a House committee and awaits action by the full House. The air charter bill awaits committee action.

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