Businesses on Spokane International Airport property would be exempt from buying city business licenses or paying some utility taxes if annexed by Spokane.
The Spokane City Council approved a series of exemptions Monday in response to airport concerns that the proposed annexation of the airport could hurt its ability to be competitive.
The city is hoping to annex 10 square miles of the West Plains. Much of it belongs to the airport, but some is privately held, including Triumph Composite Systems, which manufactures airplane parts. Businesses on private land still would be required to pay the extra fees and taxes if the city completes annexation.
Councilman Al French noted that the airport’s ownership is shared by the city and county. He said the airport helps drive economic development.
“We don’t want the annexation to negatively impact that opportunity,” French said.
Officials say the goal was to create an annexation policy that allowed the airport and businesses located there to pay the same taxes and fees they pay under county rules. Spokane County does not have business licenses.
But Councilman Bob Apple, who cast the lone vote in opposition, questioned the strategy.
“I’m also concerned about people locating at the airport just to vacate their tax liability,” Apple said.
By creating the exemptions, which would affect about 70 businesses and the airport, the city gives up an estimated $39,000 in potential business license fees and more than $100,000 in utility taxes.
The city, however, still expects to earn well over $1 million more a year by annexing the airport, because some taxes that go the county would shift to the city.
Airport Director Neal Sealock said extra taxes and fees could be the difference between aviation businesses moving to Spokane or somewhere else.
“All we’re trying to do is to optimize our ability to conduct business as it’s been done,” he said.
Sealock added that the airport “didn’t dream up annexation.”
“I’ll be the first one to say, I would rather not be annexed,” he said.