A little-noticed provision tucked into an air-safety bill pending in Congress would make it easier for wealthy people to avoid paying state and local taxes on their private jets.
The legislation would bar tax officials nationwide from using the identifying information that aircraft are required to broadcast while flying as part of their tax-collection efforts.
That’s prompted an outcry from some state officials, who say it’s often difficult to track privately-owned planes and jets — and that the data is critical to being able to enforce the property taxes and other levies owed on them.
“Private aircraft owners go to great lengths to hide their aircraft from us,” said Jeff Prang, the assessor for Los Angeles County, where private jets are common. “This data helps us to identify where those aircraft are located.”
At the center of the fight is an air-safety bill lawmakers are now attempting to finalize nearly a year-and-a-half after the January 2025 collision over the Potomac River between a passenger jet and Army helicopter that killed 67 people. And it comes as taxing the rich is a major topic of debate in Washington, where private jets are a frequently invoked symbol of wealth and income disparity.
The proposal has sparked a partisan brawl, with Democrats lambasting the provision and private plane owners seeking a win.
“These are extremely wealthy individuals who are not paying their taxes,” said Rep. Laura Friedman (D-Calif), who represents part of Los Angeles and sits on the Transportation and Infrastructure committee. “This is a tool that allows my county to collect what’s owed to them. The bill should not be providing people ways to get around the law.”
But many Republicans and aircraft owners say the data is supposed to be used to improve safety — not government revenue.
This “is a critical safety technology mandated by the FAA” which some states are now “abusing to levy unfair, sometimes duplicative fees,” said Sen. Ted Budd (R-N.C.), a member of the chamber’s Commerce committee, in a statement.
Another 1,000 planes
Many states impose a range of charges on private jets, including property, sales and use taxes, that can trigger hefty bills for aircraft owners.
But they’ve long been difficult to enforce, and compliance is often poor, because people try to avoid the charges by registering and storing aircraft in other states like Montana and Delaware that don’t charge the fees.
Tax collectors got an unexpected boost though when, in 2020, the Federal Aviation Administration began requiring aircraft to adopt a satellite-based technology called Automatic Dependent Surveillance-Broadcast Out, or ADS-B Out, that continuously broadcasts their altitude, speed and identification number, among other things. For air-traffic controllers, the technology allows for more precise tracking of aircraft than radar.
But it also made it much easier for tax collectors to figure out which planes are in their vicinity and who owns them. Tax collectors can compare the identification numbers to a national registry of aircraft to attach names and addresses to planes. There are also companies that collect, sort and package the data and sell it to tax agencies.
In California, private jets are subject to sales tax as well as a 1 percent annual property tax on their value. Jet owners are supposed to file annual statements with the state, though many do not.
Since Jan. 1, Prang, the assessor, said the data has helped his office find an additional 1,000 planes in Los Angeles County, with a total assessed value of $3.5 billion.
“At one percent [property tax], that’s $35 million in local property taxes that aircraft owners had been avoiding,” he said.
Absent the technology, he said, his office would have to rely on more analog methods of enforcement like showing up at airfields and taking an inventory of planes and jets, which can be hit-and-miss.
“Obviously, we’re not catching aircraft that are not on the ground at that time,” said Prang. “Some clever aircraft owners, if they know when we’re coming, they might fly their planes out of state.”
Pilot privacy
The Aircraft Owners and Pilots Association, a trade group known as AOPA, has been pressing lawmakers to ban anyone from using the tax to collect revenue. The group said pilots bought the expensive technology for their aircraft in order to comply with safety regulations, not to help tax collectors.
“ADS-B is a safety tool to prevent mid-air collisions, and that’s what it should be used for,” said Jim Coon, AOPA’s senior vice president for government affairs and advocacy. “This is a misuse of a safety tool.”
“They can find other tools to collect fees.”
Coon also called the practice an invasion of pilots’ privacy.
The House bill, H.R. 7613, approved in April, says the data “may not be used by any person, government agency, or other entity to identify aircraft for the purpose of obtaining revenue from the owner or operator of such aircraft” without permission.
In an accompanying report on the measure, Republicans said that would “establish a clear, nationwide standard, preempting any future state, local, or tribal law, ensuing that ADS-B is solely used for its intended safety purpose.”
A competing proposal in the Senate, S. 2503, doesn’t include the provision, and lawmakers are now trying to hash out a compromise plan. The Trump Administration is opposed to tax collectors using the data.
“We frown on the concept of using ADS-B information for revenue collection at airports and if we need to step up that, in terms of how aggressively we dissuade them, we will,” FAA Administrator Bryan Bedford told lawmakers at a May 19 hearing.
Officials in more than a dozen states use ADS-B data to aid in tax collections, industry experts say. In March, Alabama’s Department of Revenue predicted the proposed ban would cost the state $18 million annually.
“Being able to use technology in a manner to efficiently collect fees and taxes that nobody disputes are owed is just common sense, and something we should be doing,” said Rep. Shomari Figures (D-Ala.).
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