The bill passed Thursday now goes to Gov. Scott Walker.
The proposal would benefit companies like Gulfstream in Appleton and Cessna in Milwaukee. Those companies and others say having to pay the sales tax puts them at a competitive disadvantage because aircraft owners are taking their business to other states that don't charge the tax.
Supporters say the tax cut would cost about $3 million a year in lost revenue, but it would generate more than twice that much in increased business for the aviation companies.