State Taxes
This page is intended to serve as an introduction to the vast body of law governing the taxation of general aviation among the fifty states in the nation. Aircraft owners must consider sales and use taxes, fuel taxes, property taxes, and a host of additional state-specific issues when planning for the acquisition and operation of general aviation aircraft.
The NBAA State Aviation Tax Report, and the articles on this page provide summary-level information about a wide range of tax issues affecting general aviation at the state level. Since these materials are general in nature, Members are encouraged to obtain legal and tax advice on specific facts and circumstances regarding their acquisition and use of general aviation aircraft for business.
NBAA Tax News From Across The Country
Industry Advocates Continue to Focus on Possible NY Tax Increase
June 1, 2009
NBAA and New York-area business leaders are continuing to fight to keep tax increases on business aviation out of the state budget. Although NBAA’s efforts this year succeeded in removing an unfounded “luxury tax” on business aircraft, the final draft still fails to renew a sales tax exemption for aircraft purchases, repairs, maintenance and parts. Transactions that have been exempt for five years could now be taxed at a rate of up to 8.75 percent. Learn more about the New York budget issues.
Nevada’s New Program Detects Sales and Use Tax Evasion
May 11, 2009
Nevada officials have implemented a program to determine if residents have evaded sales and use taxes by registering property in a state or jurisdiction which either does not levy sales and use taxes or does so at a lower rate than Nevada’s. If the program determines that a Nevada resident is attempting to evade the tax, a 10-percent penalty on the amount owed plus 1 percent interest per month the tax is not paid could be assessed. In some cases, the penalty assessed could be 300 percent.
NBAA Opposes Proposed Illinois Tax on Business Aircraft
March 2, 2009
NBAA opposes a legislative proposal in Illinois that fails to recognize the essential role of business airplanes to companies by treating them as a "luxury" for tax purposes. The legislation would impose a 5 percent Illinois "luxury" tax on aircraft valued at over $500,000, which would come in addition to the current state and local use taxes. NBAA encourages Members located in Illinois to contact their state representatives to ask them to oppose this legislation, which currently is under review by the legislature's Sales and Other Taxes Subcommittee. Learn more about this proposal.
NBAA Works With Regional Groups to Address Onerous State Aviation Tax Proposals
January 26, 2009
As states across the nation face budget deficits, tax exemptions are coming under increased scrutiny by state legislatures that are seeking to raise revenue. NBAA's regional representatives and the NBAA Tax Committee are closely monitoring state legislative proposals that could increase tax burdens on business aircraft owners and operators, and are speaking out about the value of aviation-related tax exemptions. States that have implemented such exemptions have created new, well-paying jobs at airports in those states, resulting in additional tax revenue. Learn how to get involved with business aviation regional groups.
- Massachusetts Issues Directive on Taxation of Non-Resident Flightcrew Members
- May 5, 2008
The Massachusetts Department of Revenue has issued a directive regarding the personal income taxation of non-residents who are employed as flightcrew members on aircraft based in the state. While there is a federal limitation on state personal income taxation that applies to flightcrew members who perform services on air carrier flights, this limitation does not apply to flights conducted under Part 91 of the Federal Aviation Regulations. State employers operating aircraft under Part 91 are required to withhold taxes for non-resident flightcrew members. For additional information, review the directive. - Update on Washington State Personal Property Tax Assessments
- April 30, 2007
NBAA has significant concerns regarding Washington State's personal property tax regulation and has been working with local Members and the state to address those concerns. The State of Washington Department of Revenue (DOR) has taken the position that personal property tax is due on a percentage of the entire fleet of each Part 135 operator that flies into or out of Washington. The tax is based on the value of the fleet and apportioned based on the charter operator's aircraft usage in Washington. The DOR has had the statutory authority, at least from a state tax perspective, to levy this tax for some time, but only recently actively enforced this law against taxpayers who did not have a substantial presence in Washington. An article providing background on this property tax situation has been provided to NBAA Members by a member of NBAA's Tax Committee.