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Comprehensive Tax Reform Review

AADA Article TaxReformThe year of rollercoaster changes will perhaps be 2017’s lasting impression While positive changes have already occurred in Arkansas this year with the expansion of the flyaway-state tax exemption, larger impacts are edging onto the horizon with national tax reform. Congress is currently working to modify the current tax code.

Many aerospace and defense industry representatives are working to overhaul the comprehensive tax code into something that is more sensible. As one of the nation’s largest exports, by reforming the tax code, the importance of such changes cannot be understated. A more sensible tax code would stimulate job creation in the economy, make the U.S. more attractive for business investment and level the international playing field for American-made exports.

The ultimate goal is simple: maximize the vibrancy of the aerospace and defense industry’s workforce and contribution to the U.S. economic strength. The Arkansas Aerospace and Defense Industry is hopeful that Congress can make the corporate tax rate in the U.S. more globally competitive. In addition, any changes that would allow aerospace companies to invest more into their future workforce will be welcome changes.

Members of the U.S. Congress should are currently discussing methods to offset lost revenues from cuts to both corporate and individual income tax rates through additional revenue raising measures. The industry will follow closely where this discussion progresses.  Recognizing that there will need to be more than one possible solution, AADA stands ready to work with Congress to foster more options, leading to the most positive impacts as possible.

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Looking inside World Trade Center Arkansas

AADA Article WorldTradeCenterAerospace and aviation products, the current leading dollar-value export of Arkansas, have carved out an important role in maintaining and stimulating the state’s economy. Working with the World Trade Center Arkansas (WTCA), and the Arkansas Economic Development Commission (EDC), the AADA has been afforded numerous opportunities in expansion.

The WTCA’s utilizes State Trade and Export Promotion (STEP) Grant funds, as well as Economic Development Administration (EDA) funding to pioneer aerospace and aviation companies attendance at the world’s largest air shows – Paris, Farnborough, and many others.  Organizing commercial diplomacy and hosting foreign-buying delegations, such as trade ministers, ambassadors, and consul generals (including business representatives) creates the environment in which business to business (B2B) meetings can foster growth and stronger relationships.

These showcases provide the opportunities necessary for beginning and growing relations with international buyers, which in turn increases Arkansas’ attractiveness to future investors. With a focus of growing Arkansas’ exports, the WTCA recognizes the huge implications of having such a strong STEM industry such as Aerospace; Arkansas possesses the potential to draw engineers and has the resources to develop and educate its own workforce (thereby increasing Arkansans moving into STEM careers). Dan Hendrix, CEO of World Trade Center Arkansas, explained, “More companies will be attracted to Arkansas for investment because of its developed workforce. Ultimately, Arkansas could become an even greater pioneering state for 21st century technologies…”

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Proud Achievements Along Our Flight Path

AADA Article AADAFlightPathAs the years continue to roll by, let’s take a moment to look back on some of the biggest ways the Arkansas Aerospace and Defense Alliance is shown diligently working for its members:

On the legislative front, two impressive reforms have been initiated thanks to the AADA’s involvement:

  1. The implementation of a flyaway-state tax exemption for aircraft in Arkansas: where if an aircraft with a gross takeoff weight of greater than (or equal to) 9500lbs, the purchaser is not an Arkansas resident, and the plane will not hangar in Arkansas, that purchase is tax exempt. This became an Important incentive for people to conduct aircraft sales transactions in AR. Since maintenance and other aircraft updates are likely to occur in the state of the transaction, this would lead to continued job growth in AR, instead of encouraging buyers to perform transactions in neighboring states.
  2. Changes to some laws, altering the tax exemption on repair parts and labor. While ultimately just a slight word adjustment (“an aircraft takeoff of weight of 12,500lbs OR above”), many new classes have become included; expanding existing numbers of aircraft that can have work performed without having tax collected on parts and labor for those aircraft. Customers now choosing MRO shops in AR, as this has made us more competitive with our neighboring states, where these exemptions already existed.

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NBAA-BACE The Place to Be In 2018


Assisting aerospace and defense companies to showcase their products and services to the international marketplace is a longstanding mission of the AADA. International trade shows are an excellent way to accomplish that goal. One such tradeshow that is quite popular in the Aerospace and Defense community is the NBAA Business Aviation Convention & Exhibition (NBAA-BACE).

It is one of the largest business aviation events in the world, and come 2018—AADA is going and you can too. Our president, Gina Radke says, “Bringing all the major OEM’s of corporate aircraft together, has been noted as being ‘a years’ worth of business in 3 days.’” The NBAA show not only connects those suppliers who support corporate aviation, but it connects those suppliers with third tier suppliers such as machine shops, advertising, labels, QA consultants, hardware and chemical suppliers, and many more. Basically, if an aerospace company needs it to run, you can sell it at NBAA.

We are carrying through with our commitment to provide more value to our members and to other Arkansas Aerospace companies. We are excited to provide this opportunity. AADA will partner with the Arkansas World Trade Center to provide a booth at the 2018 NBAA-BACE. This will drastically lower the cost of a company attending and participating with an exhibit space.

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Up and Coming with the AADA

AADA Article UpAndComingThe AADA has been working hard to provide valuable opportunities to members, including training opportunities, member events, and even ways for member companies to attend trade shows at discounted cost through grants and strategic partnerships.  There’s a lot to look forward to during the last two quarters of 2017 and going into 2018.  Here are some highlights from this year and events members will want to be aware of and participate in.

AADA Membership is now at an all time high at more than 35 companies and has grown every quarter since the organizations inception in 2006. There are also a number of new applicants still under review for membership.  Several companies have also been added from the Northwest Arkansas region, and the Alliance is looking at opportunities to organize an event in the area.

AS9100 Auditor Training is being offered for member companies on September 7th and 8th. The first training of its kind for the AADA, there will be a special one-time two-day training for internal auditors. The course provides a more affordable alternative to traveling out-of- state for training that is essential to augmenting and sustaining existing programs. The program focuses on providing low cost, local training to companies who utilize the ISO/ AS9100 Quality Management system. The training will not only provide insight to the upcoming changes to AS9100 Rev D, but train internal auditors for each company.  The 3rd Quarter Board Meeting will also be held on September 7th at the UA Pulaski Tech Business and Industry Center.

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