Washington Lawmakers Target Luxury Aircraft Tax Repeal in House Bill 2347

(WASHINGTON STATE) — Washington state lawmakers pushed ahead with efforts to repeal a new luxury aircraft excise tax, setting up a fight weeks before the measure takes effect on April 1, 2026.

Legislators enacted the 10% luxury aircraft tax on non-commercial sales or leases of aircraft valued over $500,000, but aviation businesses and airport officials have pressed for a rollback, warning the policy could drive aircraft and related spending out of Washington.

House Bill 2347, sponsored by Rep. Tom Dent (R-Moses Lake), seeks a full repeal without offsets. The House Transportation Committee held a public hearing on February 3, 2026, drawing testimony that highlighted concerns about delayed purchases, out-of-state relocations, lost jobs and reduced maintenance revenue.

A competing Senate approach would keep money flowing to Sustainable Aviation Fuel goals while easing the impact on aircraft transactions. That proposal, backed by Sen. Marko Liias (D-Edmonds), would partly replace revenue with a 7-cent-per-gallon aviation fuel tax increase and doubled aircraft registration fees.

Washington enacted the luxury aircraft tax through ESSB 5801, which Governor Bob Ferguson signed on May 20, 2025, as part of a transportation revenue package. Under the law, the 10% rate applies to the value exceeding $500,000.

The law directs revenue to the Sustainable Aviation Fuel account, tying the luxury aircraft tax to Washington’s push to support Sustainable Aviation Fuel infrastructure and related environmental and economic development aims. The funding link has become a central fault line in the repeal debate.

Aviation industry groups and some airport stakeholders argue the policy makes Washington less competitive for aircraft purchases and basing decisions, with effects extending beyond high-end buyers. They have framed aircraft as working equipment in sectors that include agriculture, medical transport and wildfire response.

Dent’s bill takes the most direct path by wiping out the tax without substituting another revenue stream. That approach has appealed to opponents who say the state moved too quickly to impose what they call a “luxury aircraft tax” on non-commercial transactions, even as they warn it could reduce activity at airports that depend on based aircraft.

Liias’ proposal reflects pressure from Paine Field tenants and other stakeholders who urged lawmakers to reconsider how the state funds its Sustainable Aviation Fuel ambitions. Instead of ending the tax outright, the Senate concept keeps Sustainable Aviation Fuel funding in view while changing where the money comes from.

Negotiations remain unresolved as House and Senate lawmakers weigh whether Washington should replace revenue tied to aircraft transactions or drop it in the name of competitiveness. The debate has put climate-linked funding objectives and business-impact warnings on a collision course in Olympia.

The tax’s scope has driven some of the sharpest arguments, because it reaches beyond new aircraft purchases. Opponents say the law can apply to pre-owned aircraft that become based or used in Washington after April 1, 2026.

The measure also intersects with existing sales and use taxes already levied on aircraft transactions. Opponents say the new 10% charge would add to existing ~10.3% sales/use taxes, raising overall costs for some buyers and operators.

Companies and aviation stakeholders have told lawmakers they are already changing plans in response. Buyers have delayed or redirected purchases to other states, including Oregon and Idaho, according to accounts raised during the debate.

Schweitzer Engineering relocated aircraft from Pullman to Idaho, a concrete example cited as opponents argued that Washington risks losing based aircraft and the downstream economic activity that comes with them. They have warned that basing decisions influence where aircraft are maintained, where crews buy fuel, and where companies purchase services.

Rural airports have featured prominently in testimony and lobbying, with warnings that reduced based-aircraft activity could hit airport finances and federal matching funds. Opponents have also argued that raising the costs of operating and basing aircraft in Washington could ripple into services that rely on aircraft access, including emergency response.

Supporters of keeping some funding mechanism have countered that Washington needs reliable support for Sustainable Aviation Fuel infrastructure, and that the Sustainable Aviation Fuel account was designed to build that capacity. They have argued that eliminating dedicated funding could undermine the state’s environmental goals tied to aviation.

John Flanagan of the Port of Seattle urged lawmakers to retain some funding for sustainable aviation fuel infrastructure while acknowledging concerns about unintended impacts on small businesses and emergency services. Flanagan also warned that full repeal risks environmental goals, reflecting the Port’s view that Washington should not abandon the Sustainable Aviation Fuel funding link entirely.

The clash has left lawmakers trying to balance competing priorities: keeping Washington attractive for aviation business while sustaining a stream of money intended for Sustainable Aviation Fuel development. In public discussion, the question has often turned on whether a tax tied to aircraft transactions is the right tool for that job.

A central difference between the two tracks is how they treat the revenue question. Dent’s House Bill 2347 would repeal the tax and leave no offsets in place, while Liias’ Senate concept aims to preserve some level of Sustainable Aviation Fuel support through other aviation-related charges.

The Senate proposal’s specifics — a 7-cent-per-gallon aviation fuel tax increase and doubled aircraft registration fees — have drawn attention from operators who say they would bear added costs in different ways. Supporters have presented that approach as a way to avoid concentrating the burden on a small number of transactions while still maintaining a funding stream.

The policy fight has unfolded against the clock of the April 1, 2026 effective date. Aviation groups have pressed lawmakers to act quickly, arguing that purchase decisions and basing plans must be made months in advance and that uncertainty alone can push activity elsewhere.

As of early 2026, hearings have continued as lawmakers consider whether to repeal the tax outright, replace the revenue, or settle on a partial approach. House and Senate differences await negotiation before the session ends.

Dent’s repeal bill includes an emergency clause for immediate effect if passed, a procedural feature that supporters say would prevent the tax from taking effect as scheduled. That provision has added urgency for stakeholders who want clarity before April.

Lobbying has continued on multiple fronts, with aviation groups working legislators as well as Governor Ferguson. The governor signed ESSB 5801 in 2025, but opponents have continued to argue that Washington should reverse course before the tax begins applying to non-commercial sales and leases above $500,000.