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Aircraft Delivery
Taking flight: Tax Aspects of Aircraft Ownership

by Victor C. Anvick, MST, EA, Atis Group LLC, copyright March 2007

Each state has its own sales and use tax laws — especially for aircraft. The taxes imposed on aircraft purchases may be fixed regardless of aircraft cost or range from zero to 8.25% or more of the purchase price. The state in which you accept delivery may have its own aircraft-use taxes, even though the company may not have any nexus with that jurisdiction. Don't try to register an aircraft in states such as Delaware or Oregon that have no tax to evade your own state's taxes unless you have an office in that state and intend to base the aircraft there. Some states have penalties of up to 300% for residents who improperly register an aircraft to avoid sales taxes.

CPAs should carefully research state and local aircraft sales and use taxes in their client or employer's jurisdiction before delivery Some states, such as California, exempt aircraft used in interstate commerce or for air charter; others offer a sales and use tax credit when you trade in one aircraft for another.

Planning tip. Don't depend on the aircraft broker or factory sales representative to have current knowledge on this subject. Do the research yourself or hire an aircraft tax specialist.