February 28, 2022 –Even before the pandemic crippled most state governments in the United States, California was aggressive at collecting (and spending) taxpayer’s money. Nowhere has that been more evident than when someone residing in California buys an aircraft and hangar’s it in the State. But those that are ‘in the know’ have been reluctant to share the closely held secret of how they LEGALLY avoided paying sales tax…
Prices of new and used aircraft are like any other big ticket item in this post-pandemic (hopefully) world, through the roof. Time-frames for newly built general aviation aircraft are being quoted in years and not months at this point, and the unavailability of new aircraft has bolstered used aircraft prices, the likes of which we have never seen. With the prices of new & used aircraft at historical highs, how can anyone even consider paying 7%-11% more for their aircraft, in the form of state sales and use taxes?
Don’t think you only have to worry about your ‘home’ state when you are buying an aircraft. WHERE you buy your aircraft makes a difference. There are several states that will allow you to close on your aircraft transaction and leave without paying sales tax, but there are many more states that don’t have a ‘fly-away’ exemption. And even if the state you close in has a fly-away exemption, do you know the requirements to use the exemption in that state?
There are seven states in the US that don’t impose sales tax on general aviation aircraft. There are 43 states that do impose sales or use tax on aircraft that are purchased, transferred or just moved into their states. All 43 of those states have legal sales tax exemptions that our aviation tax consultants can utilize to help you reduce or eliminate entirely, the sales tax you must pay otherwise.
Don’t make the mistake of trying to manage an aircraft sales tax exemption on your own. Once the exemption is ‘blown’, there is little you can do to correct the error. We have the knowledge and experience to help you navigate through the process of acquiring your new aircraft and avoiding sales tax. Let the professionals at Ascendant Aviation Tax & Accounting advocate for you and help you keep more money in your pocket. Use the “Contact” link at the top of the page to reach out to us for a free consultation.