Sales Tax Traps

Can you buy your aircraft and ‘Fly Away’ without paying sales tax?

Prices of new and used aircraft are like any other big ticket item in this post-pandemic 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?

And don’t think you only have to worry about your ‘home’ state when you are buying an aircraft, either.  WHERE your aircraft is located when you close on the sale makes a big difference too.  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?

A ‘fly-away’ state is a state that allows you to purchase an aircraft in their state and then ‘fly away’ to your home state without having to pay their sales tax on aircraft. However, there are rules in every fly away state that you need to be aware of BEFORE you buy your aircraft. Most of the states have paperwork that is required and some of them have additional rules about bringing your aircraft back into their state after you close on the sale.

States with No sales tax on aircraftStates with Sales Tax on AircaftStates with Sales Tax Exemptions

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 or the “Schedule A Call” button at the top of the page to reach out to us for a free consultation.

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