Arizona ought to be a mecca for airplane owners. Locations are far-flung, the climate is ideal for aircraft storage and preservation, and there is no shortage of individuals who can afford to fly their own planes. In addition, Arizona has a healthy defense-related aerospace industry. Personal aviation should be an inevitable spinoff.
But Arizona has the second-fewest number of aircraft per person in the Southwestern U.S. Only California has fewer. Why? Bad tax policy leads to negative economic consequences, and Arizona has both with its special tax on airplane owners.
The problem lies with our aircraft registration fees, which really are a personal aircraft property tax. Every year, aircraft owners pay a half-percent of the wholesale value of their aircraft, as determined by the Arizona Department of Transportation. Even aircraft that are not airworthy carry a minimum $5 registration fee. Nonresidents who have their aircraft in the state for more than 90 days total for the year are supposed to pay a fee as well.
According to the National Business Aviation Association, almost half of the other states have no aircraft registration requirement at all. When they do, the fee is either a modest set amount, or based on weight or passenger capacity.