BILL ANALYSIS Senate Research Center S.B. 1030 89R3835 BEF-F By: Nichols Finance 3/7/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Currently, maintenance, repair and overhaul (MRO) facilities for general aviation aircraft in Texas are at a competitive disadvantage, as most of the surrounding states do not charge sales tax on parts. With the inherently mobile nature of aircraft, Texas maintenance shops are losing business, especially when major maintenance is required. Surrounding states that provide an MRO tax exemption for general aviation. A 2022 economic study calculated that a disproportionate share of regional MRO activity currently occurs outside the state, especially in Kansas and Oklahoma. It assesses that a more competitive sales tax policy could reverse this situation. According to the study, by removing the anti-competitive, antiquated MRO tax for general aviation, the Texas economy stands to gain 9,700 jobs, over $1.4 billion in direct spending, and $57.2 million in added tax revenue. Making Texas competitive with neighboring states will help the general aviation industry continue to flourisha more competitive sales tax policy could yield millions in economic activity, thousands of jobs, and millions in state revenue. S.B. 1030 encourages the general aviation industry to expand their footprint in Texas by creating additional jobs among suppliers, manufacturers, repair and maintenance companies, flight schools, and all other general aviation-related businesses. S.B. 1030 would amend current law relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft. As proposed, S.B. 1030 amends current law relating to the exemption from sales and use taxes for certain aircraft components and other property required for normal aircraft operations. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 151.328(e), Tax Code, as follows: (e) Provides that tangible personal property that is permanently affixed or attached as component part of an aircraft, rather than an aircraft owned or operated by a person described by Subsection (a)(1) (relating to a person using the aircraft as a certificated or licensed carrier of persons or property) or (a)(2) (relating to person who has a sales tax permit and uses the aircraft for the purpose of providing flight instruction), or that is necessary for the normal operations of the aircraft and is pumped, poured, or otherwise placed in the aircraft is exempted from the taxes imposed by Chapter 151 (Limited Sales, Excise, and Use Tax). SECTION 2. Makes application of this Act prospective. SECTION 3. Effective date: September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 1030
89R3835 BEF-F By: Nichols
Finance
3/7/2025
As Filed
Senate Research Center
S.B. 1030
89R3835 BEF-F
By: Nichols
Finance
3/7/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Currently, maintenance, repair and overhaul (MRO) facilities for general aviation aircraft in Texas are at a competitive disadvantage, as most of the surrounding states do not charge sales tax on parts. With the inherently mobile nature of aircraft, Texas maintenance shops are losing business, especially when major maintenance is required. Surrounding states that provide an MRO tax exemption for general aviation.
A 2022 economic study calculated that a disproportionate share of regional MRO activity currently occurs outside the state, especially in Kansas and Oklahoma. It assesses that a more competitive sales tax policy could reverse this situation. According to the study, by removing the anti-competitive, antiquated MRO tax for general aviation, the Texas economy stands to gain 9,700 jobs, over $1.4 billion in direct spending, and $57.2 million in added tax revenue. Making Texas competitive with neighboring states will help the general aviation industry continue to flourisha more competitive sales tax policy could yield millions in economic activity, thousands of jobs, and millions in state revenue.
S.B. 1030 encourages the general aviation industry to expand their footprint in Texas by creating additional jobs among suppliers, manufacturers, repair and maintenance companies, flight schools, and all other general aviation-related businesses.
S.B. 1030 would amend current law relating to the sales and use tax exemption for the repair, remodeling, or maintenance of aircraft.
As proposed, S.B. 1030 amends current law relating to the exemption from sales and use taxes for certain aircraft components and other property required for normal aircraft operations.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 151.328(e), Tax Code, as follows:
(e) Provides that tangible personal property that is permanently affixed or attached as component part of an aircraft, rather than an aircraft owned or operated by a person described by Subsection (a)(1) (relating to a person using the aircraft as a certificated or licensed carrier of persons or property) or (a)(2) (relating to person who has a sales tax permit and uses the aircraft for the purpose of providing flight instruction), or that is necessary for the normal operations of the aircraft and is pumped, poured, or otherwise placed in the aircraft is exempted from the taxes imposed by Chapter 151 (Limited Sales, Excise, and Use Tax).
SECTION 2. Makes application of this Act prospective.
SECTION 3. Effective date: September 1, 2025.