In 2015, the Nevada Legislature gave sales and use tax abatements to the aviation parts and maintenance industry. “This measure will allow Nevada to be more competitive in aviation transportation and the burgeoning unmanned aerial vehicle industry,” Gov. Brian Sandoval said when he signed the bill.
But the legislation was eliminated in 2017 — unintentionally, according to Derek Armstrong, deputy director of the Governor’s Office of Economic Development. So GOED is asking legislators to reinstate the abatements this year. The Assembly Taxation Committee has filed a bill to that effect, Assembly Bill 36.
When legislators heard the bill in 2015, supporters noted that Nevada was one of only a handful of states that did not provide such tax abatements. The Department of Taxation estimated the Nevada abatement would equal $665,000 annually.
State economic development officials argue tax abatements and other incentives to private companies have become mandatory if states want to compete, because nearly all other jurisdictions do it. Critics contend that very ubiquity of tax breaks and incentives amounts to nationwide surrender of state and local government to private sector wishes, at the public’s expense, in an effective “race to the bottom.”
Acknowledging heightened public and political wariness of incentives, Armstrong said the Office of Economic Development does not plan to seek other legislation expanding tax abatements or incentives during the 2019 legislative session.