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Washington Governor Bob Ferguson signed a new bill on Tuesday that repealed the state's 10% luxury tax on high-value aircraft.
Washington Senate Bill 5801 was introduced in the Senate on March 25, 2025, approved in May 2025 and was scheduled to take effect on Wednesday. It added a 10% luxury vehicle tax to any sale, lease or transfer of certain vehicles exceeding $100,000. Any recreational vehicle exceeding $500,000, including aircraft, also faced this tax. Multiple aviation groups were against the new tax, including NBAA and the Pacific Northwest Business Aviation Association (PNBAA). A coalition was formed in April 2025, urging the Governor to veto the bill.
House Bill 2711 replaces the tax with an increase to Washington's aviation fuel tax from 18 cents per gallon to 25 cents per gallon. It also includes an increase in aircraft registration fees, which will climb automatically by 2% per year. The bill will become effective on June 11, 2026.
"When the tax was enacted last year, it posed a serious threat to Washington's aviation ecosystem, risking aircraft relocation, lost jobs, and reduced investment across the state." said PNBAA on LinkedIn. "Aircraft began leaving Washington and aviation businesses quickly felt the impact.
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Of the 140 airports in Washington, only a handful have regular airline service, according to the NBAA. The rest are primarily used by general aviation aircraft. Aviation supports over 407,000 jobs in Washington and a payroll that exceeds $26.8 billion. The industry generates more than $107 billion in annual business revenue.
"The success in halting the original aircraft tax is a win for job creation, local investment and economic opportunity," said NBAA Regional Director Phil Derner. "The measure signed today represents the views of a wide range of stakeholders and, importantly, ensures our seat at the table as an active, contributing neighbor in the state of Washington."