How Washington’s bizav community fought against 10% luxury tax

opinion

by Fayaz Hussain

April 27, 2026

When the state of Washington’s legislators passed the 2025 HB 2711 luxury tax of 10% on aircraft’s original value, only a few outside business aviation noticed. The bill was rushed through the legislature within a span eight to ten weeks. By the time the statutes became clear, the bill had already become law. With date in effect of April 1, 2026, the clock was ticking for the sector to do something before the tax wiped out business aviation from the state.

The 10% luxury tax was applicable to all commercial and business aviation assets across the board with exemptions for those below $500,000. The state has introduced other taxes on high net-worth individuals including the 9.9% millionaire’s tax. The political climate was not conducive to relief especially for business jet owners.

“Where I live is very much eat the rich,” says Alan Burnett, director of Legislative Affairs for the Pacific Northwest Business Aviation Association (PNBAA). “The idea of repealing a tax on private airplanes seemed impossible. Several lobbyists told us – that’s impossible.” While the repeal of the luxury tax seemed unlikely, the damage was real, immediate and spreading quickly.

But it wasn’t just the high-net-worth individuals who were being affected. Within months of the tax passing, the consequences began showing across the state’s airfields. At one facility in Seattle, four of the nine hangars sat empty. Another aircraft cleaning said they lost nine clients. An aircraft management company unwillingly mulled relocating to the neighbouring state of Idaho. The company said it had no choice but to move because clients were departing so rapidly.

“It was destroying the industry,” Burnett said. “People were moving out right and left. This is a very mobile group of people, and a 10% tax on the original value of your airplane is enough to make a difference.”

The ripples of the tax were felt beyond the wealthy passengers in the back of the jet. Mechanics, pilots, fuel suppliers, hangar operators, lawyers – all of the stakeholders across the business aviation value chain in the state – felt the ground shifting beneath them.

The mobility of the aircraft assets meant that unlike a factory or a warehouse, the capital did not stay put when conditions became unfavourable. “It wasn’t just airplanes,” Burnett noted. “Entire businesses were moving to Idaho or to a bunch of states near us. It wasn’t hurting the rich guys in the back of the plane. It was hurting the pilots and the mechanics and the people who sell fuel and the people who provide hangars.”

Nel Stubbs, principal of Stubbs Aviation Advisors, with nearly four decades of experience in aviation legislation said: “When aircraft leave, what else is leaving? Your maintenance technicians are leaving. Your pilots are leaving. Your schedulers, anybody associated with the airport – they’re all leaving because the aircraft aren’t coming in.”

Stubbs said part of the reason why the bill wasn’t contested initially was because of the fast-paced nature of Washington’s legislative calendar. With sessions lasting more than just two months from introduction to passage, there was little to no time for industry to mobilise and mount opposition.

“It happened really quickly,” Stubbs recalled. “I knew when it was happening, but nobody could get anybody’s attention. It was just boom, boom, boom – we have it in our head, we’re going to get it done, we don’t have time to listen. So, it passed.” Stubbs tracks aviation legislation across more than 50 US states.

The bill cleared in April last year with effective date of April 1 this year. While the long gap between enactment and enforcement was frustrating for many as it meant watching the damage accumulate, it gave the industry a window to act. Burnett said he gathered the stakeholders to make the most of available time.

Rather than launching a frontal assault on the tax, Burnett-led coalition of aviation stakeholders assembled through the PNBAA and took a more considered approach. The group approached Senator Marko Liias who originally sponsored the HB 2711. Burnett said they presented their case by highlighting the unintended consequences.

“We approached him to explain the massive problems this was causing with the industry,” Burnett said. “But more importantly, it would have a catastrophic impact on the Washington aviation industry. And at the same time, it would cost the state more in tax revenue – because people were leaving the state right and left – than it would ever bring in under the projected analysis.”

Giving senator the due credit, Burnett said Liias listened. Liias formed a stakeholder group bringing aviation stakeholders to work towards a compromise. The long-drawn process required careful framing of industry’s concerns and willingness to accept a compromise.

Burnett said his colleagues raised funds, hired a lobbyist, and assembled a coalition of aviation organisations to launch a serious and sustained campaign.

The result was a negotiated settlement. The 10% luxury tax was fully repealed. In its place, a compromise bill was introduced with a seven-cent-per-gallon increase in aviation fuel tax and a modest rise in aircraft registration fees.

“That, to me, is a win,” said Stubbs. “Not having the luxury tax – that is a win. And the increase in registration fees is not significant.” Meanwhile, the registration fee increase was minimal relative to the multi-million-dollar aircraft valuations.

The bill with revised provisions was delivered to Washington Governor Bob Ferguson in March. It was signed shortly before Easter – with support from both sides. “It was bipartisan,” Burnett noted. “You didn’t have one party fighting with the other. The governor was not opposed to it.”

But Washington’s battle with punitive legislation isn’t isolated. Across the US, multiple states including New York and New Jersey have laid forth bills that industry watchers describe as potentially damaging.

In other parts, news is more encouraging. The island state of Hawaii is fast-tracking a bill to exempt taxes on aircraft maintenance. Tennessee is pursuing a similar maintenance exemption. Nebraska is examining an exemption for leases between related parties.

But Washington’s dynamic showed that often speed can lead to a poorly understood bill becoming a law in a short legislative session. “I mean, people were moving out right and left,” Burnett reflected. “We figured we had to try.”