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Which States have high Aircraft Property and Sales taxes?

Alex Clark

Registered User
Life Long Alaskan
Here in my part of Alaska I get a $100 personal property tax bill from the Borough (our County) once a year.
In much of Alaska there is no property tax for aircraft and no sales tax on one either.

HOWEVER I was informed that in some states they have fairly high personal property taxes on Aircraft and some
states will tax the owner a sales tax unless he or she can prove they paid the tax in another state before moving the plane into the taxing state. .....Is this true???


I figured since folks here are from all over the place, somebody could shed some light on this subject.

I am interested as in what happens when I move out of Alaska. I have never been a resident anywhere else.
 
and some states will tax the owner a sales tax unless he or she can prove they paid the tax in another state before moving the plane into the taxing state. .....Is this true???

That part is true. In Washington if you buy anything out of state that would be sales taxable in WA, then you will pay a "use tax" (for the privilege of using the personal property in WA)--unless you can show you paid a sales tax elsewhere. Even then, you might pay the difference. (There are limited exemptions).

Most states with sales taxes have the same scheme.

It used to be that folks in WA would buy their big ticket items like airplanes and RVs in Oregon (no sales tax) and pretend to keep them there. Then WA coerced Oregon to send them info of sales and purchasers' addresses. Whopping use tax bills followed. Sometimes criminal charges followed too.

https://dor.wa.gov/find-taxes-rates/other-taxes/aircraft-excise-tax
 
I got raped by Washington as well for bringing my airplane into their state for the short time I lived there. They had the state police patrolling the airports. If your N number was recorded at a Washington airport a couple of times with no Washington state sticker on the tail , the state would send a summons to appear at the assessors office.

The least taxed state I have run into for aircraft was New Mexico. No sales or property taxes on the private purchase of an aircraft. Registration fees are calculated based on gross weight. 2 cents per pound of gross weight for a new aircraft with the cost rapidly dropping to 1 cent per pound of gross weight over a 4 year period. So my 2000# gross weight Cub Clone started out at $40/yr when I finished building it and quickly dropped to $20/yr. At my current locale in Arkansas, the value of my planes gets rolled into my overall property taxes and adds up to a couple of hundred $$ a year.

-Cub Builder
 
It looks like Texas has a new aircraft purchase tax.
BUT, if you owned and used the plane in another state for at least a year, then they will leave you alone. Plus they give CFIs and other commercial users a break on sales taxes.
At least that is what I think I just read.

It looks like Oklahoma nails new residents for what they think the value of your aircraft might be. AT least I think that is what their confusing web site says.
 
NYS taxes the crap out of everything. But 3 years ago the tax laws changed and now no sales tax on aircraft or parts.

Glenn
 
Move out to a rental or RV. Retail residency in AK. Realize there's not much left in the Lower 49 worth it. Return.

Gary
 
Texas has no aircraft tax. You can get by without paying sales tax if you buy an aircraft while a Texas resident by getting the seller to sign an "Occasional Sale" form. Texas is pretty airplane friendly.
 
It looks like Texas has a new aircraft purchase tax.
BUT, if you owned and used the plane in another state for at least a year, then they will leave you alone. Plus they give CFIs and other commercial users a break on sales taxes.
At least that is what I think I just read.

It looks like Oklahoma nails new residents for what they think the value of your aircraft might be. AT least I think that is what their confusing web site says.
Oklahoma charges excise tax (3.25% same as for a car) for vehicle purchases, but honors what was paid on previous purchases when brought into our state. As for annual taxes, if an “antique” (I believe that’s 30 years) it’s $10/year. One real plus, is Oklahoma does not charge sales tax on aircraft parts.
 
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Not sure of the details here in Vermont yet, but this past summer we had a Bahamian couple here for a few months. They rented some hangar space as well as living in a summer resort rental. Right before heading back home in the fall they were hit with both a property tax and sales tax bill on their C182T. Not exactly justified for not being property owners here. Appears they got the matter cleared up easily enough but makes me a bit scared about how I will be taxed on an E-AB build that has had tax paid one part at a time?
 
Charlie, I've done 4 EAB builds in VT, someone monitors the Fed database for new registrations and asks for documentation. I give them receipts for the kit and engine they send a bill for 6%, one time. I've learned not to register until the last minute. I hope you've got receipts for all the pieces, and they add up to something significant, or they'll tell you what the bill will be. My brother once got a scathing deal on an old rustfree 1960 pickup. $250! They told him what the bill would be. The next time it happened, despite repeated requests, he just asked them to put a value on it. They weren't going to listen to him anyway. Sort of like "Do you know how fast you were going?"
 
Arkansas state revenue office monitors the FAA database and compares aircraft registered to owners with Arkansas addresses against their sales tax records. If they show that you didn’t pay sales tax you’ll get a letter. But if the airplane is the sole asset of an LLC you can sell the business and it’s assets (your airplane) without sales tax since there’s no sales tax on the sale of a business and it’s assets. There’s an antique automobile discount on registration and tags in Arkansas but they want the full-pull on a 1947 PA-12. The revenue agents were actually a little sheepish about it when I brought that up - but that didn’t keep them from insisting on collection.


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Charlie, I've done 4 EAB builds in VT, someone monitors the Fed database for new registrations and asks for documentation.
With 97% of my purchases out of state taxes have been paid in the past year or so since the laws changed. The larger tube order was done before that so I will be liable for some of this, But thank you for this thread since another folder will get started for the future tax records time. Should be interesting.
 
More interesting for a Vermont resident is that it is the responsibility of the seller to collect tax on a sales transaction, just a bit surprised when I was asked how much I sold my plane for and where was their 6%. Fortunately the transaction took place in NH to an out of state resident which they deemed a non-taxable event. Thanks Tom! Think about the implications of telling a prospective buyer "oh by the way on top of our agreed price I need 6% for my state". I didn't like having to pay tax on the new plane knowing that if I were a business there would not be a tax consequence.
 
Yep, I sold my Champ to a fellow in NH 40 years ago and offered to fly it to Orford, but he wanted the deal to go down in Montpelier. Found out why later!
 
The worst is this: In Florida if you're in town for a couple of weeks of contract work, the revenuers will cruise the parking lots looking for out of state plates. They will make you register in FL. I know this was true in the '80's.
 
Early 80's it was not that way at least in Daytona. I was there from late '79 till 83 without registering. I did buy two motorcycles there which I put Fla tags on but my car and a bike I brought down with me stayed on Conn tags.

Now I am curious since this time of year many towns fill up with out of state residence that remain of their home state tags. I need to check with a friend in Naples on this since he earns a large portion of his income making cabinetry for them.
 
In California, everything you buy is subject to a "use tax". It is the same as a sales tax, only the buyer pays. Merchants charge sales tax; occasional sellers do not. They might ask . . . you are supposed to declare out-of-state socks on your tax return. Few do.

Avoiding aircraft tax is difficult - best to hire a specialist. You have to keep the aircraft out of the state for a year. Not worth it in most cases.

But antiques - like all Cubs including replicas - can avoid property tax by displaying 12 x/ year. Thanks to Bill Allen, a local who lobbied for the exemption. Wanna know how much you save on an Aero Commander 680? I save maybe $200/year.
 
Ha! So this is why Santa Paula has open hangars every month?

Santa Paula has an exemption for antiques, that are displayed regularly. BUT- Ventura County will tax the living daylights out of you for regular aircraft, and they are vicious. On one memorable occasion a tax auditor told me to my face that an inspector had seen my plane at Santa Paula the week before --- All the while my plane was in a container on the ocean coming home from China. LA County, and others will make your life miserable with taxes, and assume you're lying about anything and everything. I avoid California as much as possible. On the other hand, Massachusetts - known as Taxachusetts charges a reasonable annual fee in lieu of any sales tax. $100 per year is pretty darn good compared to 6% of the purchase price - Hmmm Carbon Cub at 300K x 6% is $18,000. Equals 180 years in Massachusetts. You choose.
 
Yeah, I am staying here. The nice folks at San Diego tax division greet me like an old friend when I take the display records in. Even the Decathlon is exempt.

San Diego is getting crowded. Our traffic now looks like LA traffic in 1980. But I am retired and get to choose when and where I drive. We will ultimately run out of water,or jobs, or something, but I shall check out before then. Goal is three landings per day until I croak. So far so good - 23 yesterday; seven today.
 
A buddy of mine used to live in Oregon, and still maintains a home there.
He avoids registering his aircraft in Washington (and incurring the same-rate-as-sales-tax use tax)
by parking his airplane in Oregon at least 51% of the year.
Dunno if his legal residence is in OR or WA.
 
I’m an AK resident that’s living in AL (military). I purchased my plane in Alaska. I have to pay the county ~1% of the value annually as a “use tax” because my plane is based in AL.

The first year I fought it but lost since it’s a “use tax” and not a proper or sales tax.

Not happy about it, but it could be worse.
 
While Vermont isn’t great for taxes, it could be worse. KFSO is right at the Quebec border and - from what I hear - a large fraction of the based aircraft belong to Canadians; registering, parking and flying in Vermont is noticeably cheaper/easier.

Meanwhile, neighboring NY and NH are quite favorable for aircraft taxation.


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I’m an AK resident that’s living in AL (military). I purchased my plane in Alaska. I have to pay the county ~1% of the value annually as a “use tax” because my plane is based in AL.

The first year I fought it but lost since it’s a “use tax” and not a proper or sales tax.

Not happy about it, but it could be worse.

Have you checked into a military exemption? Every place either I or later, the iwfe was stationed, I normally was able to file for a military exemption with a much reduced rate. We were never in AL though so not sure if they have one but might be worth checking into.
 
The question sorta started up when I was talking to my Aircraft Insurance broker.
I pay the regular high Alaska fees. But I do own a house in Texas, with an adult daughter living in it.
( long story, but it is a city house in which I would rather NEVER live. But I like the country parts of Texas. )

Anyway,,
I was told that if I changed the aircraft registration address to my Texas house, that it would drop my rates.
Plus it would drop my house payments in Texas since I have to pay a higher percentage rate as a non- resident.

So I started researching any advantages to moving out of Alaska for half the year at least and having either myself of my wife change our state residence.

After 61 Alaskan winters, ( less if you deduct college and military deployments) I am fed up with not being able to fly as much as I would like for almost half the year. Same goes for gardening. We only have about 4 months of gardening time and about 4 to 5 months for fresh water lake fly-fishing.

So far: Avoiding getting screwed by moving an expensive C-180 to another state. ( no sales tax ever paid )
Texas = Good
Washington = Bad
California = Super Bad. I would never go there anyway.
Arkansas = Not sure yet
Oklahoma = Not sure
Wyoming = Only confused after reading the State web site. Something about use fees.
South Dakota = Not so sure what I just read on their web site either. The AOPA says they charge by weight and age.
 
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Have you checked into a military exemption? Every place either I or later, the iwfe was stationed, I normally was able to file for a military exemption with a much reduced rate. We were never in AL though so not sure if they have one but might be worth checking into.

Yup, that’s what I tried to use last time. They said my status didn’t matter, it’s the airplane being based in AL that’s getting taxed.
 
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