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.

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  1. While I get the rant about excessive radio position reports, I would rather have that than radio silence. Especially when someone is in the area, coming into a landing, or over flying. Because with the latter, one doesn’t know what the other aircraft is going to be doing. And I have had it. One incident comes to mind when another pilot didn’t say anything. Until he called out short final. When I was setting up for a landing on the opposite end of the runway. Seems he was special and didn’t listen or want to use the current active….

  2. Thanks for a good laugh – again – Paul. Can the PMAs keep up with the rising tide of demand if they can’t get employees? Can the stagnating supply chain haul parts and components over road and rail to Iowa in time to beat the politicians’ reconsideration of eliminating this significant portion of their revenue stream? Sounds like we need another feature film.

  3. While waiting for your next student to put down their cell-phone and pick up their checklist before doing the preflight, spend some time reading about “Vivien Kellems”. She put up quite a fight against the IRS about being an unpaid tax collector. Alas, in the end she lost – not because she didn’t prove her case. Rather, the court refused to rule on that specific issue.

    • Technically, the seller owes the sales tax, not the buyer. It’s perfectly legal to not charge the customer any extra, as long as you still pay the 7%.

      • Kirks point was that Vivien felt she deserved to be paid for her “services” incurred while working for the treasury in collecting, filing, handling and dispersing of their “tax”

  4. Perfect example why a commercial pilot certificate should be a regulatory test… not a flight test. All pilots need to be trained not to crash. There is nothing in the commercial pilot training that shouldn’t be taught to every pilot.
    So, why is even a thing? It isn’t like there are hordes of jobs for a pilot with a commercial certificate… had he been trained not to crash, any commercial” operator should be able to hire any ‘pilot’… knowing that pilot is trained not to crash.
    When the FAA made a sport pilot certificate they went the wrong way dumbing things down… and people die every day now because of it.
    The military spends about 180 hrs training there pilots. About 80 to 90 hrs is in Sims including VR sims. Yes, formation flight might not be needed for a pilot, but we do require some instrument training… why not all the way?
    Whit Satellite tracking and soon coms… why not?
    ATP and Commercial certificates need to go away. We need all pilots to be pilots… and commercial operations to be businesses that have their own personal standards. If they want a CRJ pilot…they can train them. 737 same. Each type of aircraft should be logged as a check out. Each business is responsible for their employees… not the FAA.

    • Are you saying private pilots aren’t trained to “not crash”? Please explain that to me as someone who has trained hundreds of pilots and spent 20+ years “not crashing.” Please cite the ACS/PTS standards that support your argument.

      The difference in certificates is for different levels of pilot privileges. We don’t train primary students how to do IFR flying at the same time because training would last way too long and be far too expensive for most people, and even fewer pilots would be flying. Is that what you want? Not everyone wants to fly jets. The person who just wants to fly his/her personal airplane on a nice day doesn’t need to be trained to the level of an ATP pilot. Why should we require them to fly to the same level? Hell, why not just require them to get their CFI as part of primary training? Maybe multi-engine, turbine, high-altitude, and tailwheel should all be required too? That is an asinine idea from someone who doesn’t seem to have spent much time active in aviation.

      The idea of having each company set standards for pilots is a terrible one. Just look at commercial operations in third world countries. The accident rates are appalling compared to the U.S. and Europe. Why is that? Not every company cares about their pilots and their training or proficiency, and there is little to no oversight of those companies.

      I’m all for simplifying pilot training, but the training standards are there for a reason. One of the biggest reasons is to keep pilots from crashing.

    • Dick G.: What evidence do you have for melodramatically claiming the FAA “dumbed down” training and sport pilots “die every day now because of it”? Hyperbolic much?
      What the FAA did was eliminate the esoteric minutiæ that had accumulated over decades in the private pilot flight and especially ground syllabi which purely daytime, good weather, local recreational fliers would NEVER use. That actually allowed MORE flight training and ground school emphasis on aircraft control and safety even within lower total hours.
      The Aircraft Spruce “Sport Pilot Encyclopedia” and written test prep contains more pages emphasizing the relevance of regulatory compliance with specific NTSB-sourced accidents and providing aircraft operational and control tips for a lifetime of safe flying than all other industry test preps combined.
      While the accident rates of sport pilots may at first blush appear worse than private pilots, this is because a higher % of them are flying former fat-UL, ELSA and SLSA which generally have:
      1. lighter stick forces,
      2. lower powered, more complex, less reliable powerplants,
      3. generally less robust and dramatically lighter weight airframes.
      Were we to compare accident records of sport pilots vs private [and even commercial] pilots operating previously type-certificated makes and models from this list
      I am confident the rates would be equivalent, even likely favor the sport pilots.