What can you tell me about Annual Taxes, Registration Taxes, and Personal Property Taxes on aircraft, in the different States?
Dave Whitley was kind enough to compile this information for everyone.
Annual State Registration and Tax Survey Results
Some states have registration fees that they impose on aircraft. Sometimes the fees are in addition to personal property or other recurring taxes (see Alaska, Oregon, Utah, and Virginia); and sometimes they are substitutes for personal property taxes, or are one-time fees. The states imposing registration fees are listed below:
Alaska, Arizona, Connecticut, Hawaii, Idaho, Illinois, Indiana, Iowa, Massachusetts, Michigan, Minnesota, Mississippi, Montana, New Hampshire, New Mexico, Maine, North Dakota, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Utah, Virginia, Washington, and Wisconsin.
Registration fees are often imposed as a flat rate. However, sometimes the fee is dependent on the weight and/or seating capacity of the aircraft. You should check with your state or local revenue office to determine the method applied. Some states will only charge for airplanes used commercially. Check to see before you pay for registration. The other type of tax you may encounter as an aircraft owner is a personal property tax. The following states have personal property taxes that may apply to your aircraft:
Alabama, Alaska, Arkansas, California, Georgia, Kansas, Kentucky, Louisiana, Missouri, Nebraska, Nevada, North Carolina, Oregon, South Carolina, Tennessee, Texas, Utah, Virginia, West Virginia, and Wyoming.
1. It is easy to trace the existence of your aircraft through FAA or local registration documentation. I assume that is where the States get their information.
2. It is well settled that with respect to aircraft and other tangible personal property, the actual site of your aircraft, rather than your residence, determines the place of taxation. If you live in a jurisdiction with no personal property tax, you may still have to pay tax on your aircraft if you base it within a taxing jurisdiction (and vice-versa).
Therefore, when you’re planning on a place to base your aircraft, you may want to consider whether that place has a personal property tax, and choose accordingly. You can’t simply go by the law where you happen to have a residence at a specific time. You should keep in mind that many states have local personal property tax laws that permit local jurisdictions (counties or cities like New Orleans) to levy personal property taxes. Your local jurisdiction may or may not levy personal property taxes.
Most States also have sales taxes. In some cases you may be able to minimize them through judicious actions. You need to check out the situation on sales taxes before you buy, so that you can handle the purchase in the way that is most advantageous to you. In States that have only a one-time registration fee, as opposed to an annually renewable registration fee (as for a car tag), the sales tax and registration fee may essentially be the same thing.
Nothing in this correspondence, or previous or subsequent correspondence, should be construed as advice. This survey is informal and unofficial. State laws and taxes often change rapidly and vary considerably. The ideas included here are for purposes of intellectual stimulation only. The people contributing to this correspondence have poor track records. If you make decisions based on any information found here, you will very probably lose money. You are strongly advised not to make decisions based on any of the above information. Use this as a trigger to perform further personal research with your State of interest, for the most current information!