PEORIA, Ill. (WCIA) — Luxury private jet companies were hoping state lawmakers might bail them out of four-year-old unpaid sales tax bills. Instead, billionaire Governor J.B. Pritzker greeted their pleas for mercy with a stiff arm on Monday.
“I am going to veto that bill if that lands on my desk,” Pritzker pledged, explaining that the plan the House passed last week “would forgive $50 million of taxes that are owed by people who are in this private jet industry.”
A special sales tax exemption for private jet facilities expired in 2014, and the companies said that caught them off guard.
“We did not collect those taxes from our customers,” West Star Aviation CEO Jim Rankin confessed. “We didn’t know we had to. Nobody did. Therefore, if we have to go back and pay that, we are going to have to pay that ourselves as a company. You can imagine how difficult that would be if a retail outlet had to go and pay sales tax when they did not collect it from their customers to begin with.”
A lobbyist for the Illinois Aviation Trades Association notified the Department of Revenue that the combined, estimated unpaid tax bill for 14 private jet facilities could reach $50 million, according to emails WCIA obtained under the Freedom of Information Act.
The emails show the lobbyist representing West Star Aviation and 13 other Illinois facilities also asked the Department of Revenue to “perhaps say that nothing prior to July 2019 can be reclaimed?” and pushed state lawmakers to resolve the issue during the fall veto session in order “to prevent unnecessary paperwork.”
From Rankin’s vantage point as West Star’s top executive, the sales tax break would impact far more than paperwork; if his company is forced to pay all of its outstanding sales tax, it could impact their immediate bottom line and potentially jeopardize the workforce, he warned.
“I hope [Pritzker] sides with our workers in East Alton, because those are the ones that are really going to be negatively affected,” Rankin said. “If the [jet] owners decide to go somewhere else, it is going to be detrimental certainly to the growth of West Star, but it could possibly be detrimental to the employees that are already there.”
Flight Star in Champaign, a company that employs 145 workers to repair jets at the University of Illinois and at Willard Airport, has also warned it could lose up to half of its business if the expired sales tax exemption is not renewed.
Rankin said West Star’s clients could just as easily opt to fly their jets to other states for repairs where they wouldn’t have to pay the sales tax, arguing it boils down to “straight economics.”
During the period when his company didn’t charge customers a sales tax, “Illinois got the benefit of all of that work,” Rankin said.
“It certainly has helped our business,” he said. We have grown. We have added all of these additional jobs. We have invested about $25 million into physical structures. We just opened a new hangar in January of this year in Alton.”
Before he was elected governor, Pritzker operated companies that cashed in on state tax incentives designed to promote job growth in the state.
“I am focused on job creation, and I do think there are appropriate tax incentives for bringing jobs to the state, or helping businesses grow,” the governor said. “But this particular one, I just don’t think is a good idea.”
Pritzker’s public denouncement of the proposal breaks from a somewhat common tradition in the executive branch. While governors routinely declare public support for measures that align with their agenda, and often even lobby lawmakers for their votes, it is generally uncommon for them to spike a bill before it lands on their desk. Because lawmakers can amend or edit legislation several times before a proposal ultimately passes, a typical response from the Governor’s Office would normally sidestep any specific questions about bills that haven’t passed both chambers. In this case, despite unanimous support in the House, Pritzker did not hesitate to take a swipe at the idea.
After the press conference, a spokesperson for Pritzker added further insight into his decision.
“We’re not going to bail out a business that didn’t pay the taxes they were supposed to,” the spokesperson said. “If you didn’t pay your taxes, you couldn’t just use the excuse, ‘Oh, I didn’t pay my taxes because I didn’t know.'”