The Right Documentation Protects Your Tax Position From Day One
Financing an aircraft involves more than satisfying a lender’s document checklist. The paperwork signed at closing also determines whether you can claim bonus depreciation under current federal law, how Florida’s sales and use tax applies to your purchase, and whether you have a defensible audit trail if the state reviews the transaction years later. At AvTax Advisors, PLLC, our Florida aviation tax and legal advisors review aviation loan documentation before execution to ensure every structural decision protects your tax position for the life of the aircraft. Our Location aviation attorney provides comprehensive guidance on loan agreements, entity structuring, and tax-optimized closings for aircraft buyers throughout Florida.
Why Choose AvTax Advisors, PLLC for Aviation Loan Documentation?
Aviation loan documentation sits at the intersection of Federal Aviation Administration (FAA) title requirements, lender underwriting standards, and state and federal tax law. Most transaction teams (lenders, brokers, title companies) focus on their piece of that intersection. Letisha D. Sailor, Esq., Founder and Managing Member of AvTax Advisors, PLLC, brings over 20 years of aviation, tax, and accounting experience to transactions where lenders and brokers leave off, serving clients throughout Florida and nationwide from the firm’s Tampa office.
- LL.M. in Taxation from the University of Florida; admitted to the Florida Bar and U.S. Tax Court
- National Aircraft Finance Association (NAFA) member, with direct familiarity with how aircraft lenders think and what they require at closing
- National Business Aviation Association (NBAA) member, with additional professional affiliations: CFBAA, IAWA, and FABA
- Experience spanning thousands of aircraft transactions
- Integrated tax and legal guidance under one roof, with no handoff between counsel
- Flexible engagement terms tailored to each client’s transaction and service needs
Attorney Sailor’s background combines aviation, tax, and accounting, meaning one advisor covers the FAA documentation requirements, the lender’s closing package, and the tax strategy holding it all together.
What Does Aviation Loan Documentation Cover?
Aviation loan documentation covers two distinct requirements. It covers what the lender needs to fund the transaction and what you need to protect your tax position and ownership rights.
On the lender side, aircraft purchase and sale transactions involve the FAA Bill of Sale (Form AC 8050-2), which is the FAA form used to evidence transfer of ownership for registration and to support updating the FAA Aircraft Registry. The FAA Aircraft Security Agreement (Form AC 8050-98) records a lender’s security interest at the FAA Aircraft Registry in Oklahoma City, as required under federal rules governing how aircraft security agreements are recorded.
A signed aircraft purchase agreement covers price, inspection rights, closing conditions, and tax responsibilities. Logbooks, maintenance records, an annual inspection sign-off, and an insurance certificate naming the lender as loss payee with hull, liability, and breach of warranty endorsements complete the standard closing package.
Financing approval also has several hurdles. Many aircraft lenders look for a strong credit profile (often a credit score around 700 or higher), a down payment in the 15–20% range, and documented liquid reserves sufficient to cover a number of months of payments, though specific requirements vary by lender.
Approval typically takes one to two business days. Closing generally completes within five to seven business days once all documentation is in order. If the aircraft is registered under an LLC or special purpose entity, the package expands to include a Secretary of State printout confirming the entity is in active good standing, the operating agreement, and guarantor documentation tying the entity to individual borrowers.
How Does Your Loan Structure Affect Your Tax Position?
This is where most transaction teams stop. It is also where the tax exposure begins.
How you finance your aircraft determines who claims the depreciation benefits. Under the One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, 100% bonus depreciation is permanently available for qualifying business aircraft acquired and placed in service after January 19, 2025, subject to the more-than-50% qualified business use requirement. The loan structure built into your closing documents controls who receives that benefit:
- Direct loan: You are the aircraft owner for tax purposes and may claim bonus depreciation and Section 179 deductions, subject to the qualified business use threshold
- Tax/operating lease: The lessor retains ownership for tax purposes and the depreciation benefits; the lessee receives no depreciation deduction
- Non-tax/capital/finance lease: The lessee is treated as economic owner for tax purposes and may claim depreciation, including bonus depreciation. How your lease structure determines who claims your aircraft’s tax benefits is built into the closing documents.
This choice is made at the documentation stage and is difficult to reverse after closing. The IRS has also launched a business aircraft audit campaign and added a new Line 24c to Form 4562 for 2025, requiring aircraft owners claiming depreciation to certify applicable use. Most buyers find the IRS requirements to claim aircraft depreciation more involved than expected and it all traces back to how their documents are structured at closing. What the IRS evaluates when aircraft owners claim depreciation starts with your closing documentation.
What Are Florida’s Sales and Use Tax Obligations at Closing?
Florida imposes a 6% state sales and use tax on aircraft sold, delivered, used, or stored in the state, plus any applicable discretionary sales surtax, unless a specific exemption applies. In many aircraft transactions, lenders do not include Florida sales and use tax in the financed amount, leaving payment of the tax as a separate obligation for the buyer.
Florida Department of Revenue Publication GT-800008, Florida’s official guidance on aircraft sales and use tax, outlines what documentation supports exemption claims. A separate DR-15Air (Sales and Use Tax Return for Aircraft) filing is required beyond the standard closing package. The Florida Department of Revenue may use FAA registration data and other available information, including flight activity, to identify aircraft for audit, sometimes years after a transaction.
Florida imposes a late‑payment penalty of 10% of the tax due (with a minimum $50 penalty) for late returns. Additional civil and criminal penalties can apply in cases of fraud or intentional tax evasion.
For buyers using aviation entity ownership structures, leasing an aircraft to a related entity does not automatically shield the transaction from tax obligations under Chapter 212 of the Florida Statutes. This makes entity formation and loan documentation planning inseparable.
What to Expect When You Contact AvTax Advisors
Working with AvTax Advisors begins with a consultation before the loan closes. Attorney Sailor reviews your acquisition structure, financing terms, and entity ownership plan to identify tax exposure or documentation gaps before they become problems. Initial consultations are available by phone or through the firm’s contact form.
The pre-closing review covers loan structure alignment with your tax strategy, entity documentation matching the FAA registration plan, and applicable Florida exemption analysis with supporting documentation. Closing coordination includes working with the lender, title company, and escrow agent on tax-related documentation. Post-closing, the AvTax Advisors team confirms DR-15Air filing, provides document retention guidance, and supports ongoing compliance, including the substantiation records now required under the IRS aircraft audit program.
Most aircraft transactions move quickly. Getting an aviation tax advisor involved early keeps the tax layer from being the last item on the checklist.
Talk to a Florida Aviation Loan Documentation Advisor Before You Close
The lender’s document list ends at funding. Your tax position starts when you sign. Contact AvTax Advisors today to schedule a consultation before your aircraft closing, or call (866) TAX-CAVU. Serving clients throughout Florida and nationwide from Tampa.
This content is for informational purposes only and does not constitute legal or tax advice. Consult with a qualified aviation tax and legal advisor regarding your specific situation.
Frequently Asked Questions
Do lenders include Florida sales tax in aircraft loan financing?
No. Lenders generally do not roll Florida sales and use tax into the financing. That obligation is the buyer’s alone. Florida imposes a 6% sales and use tax, plus any applicable discretionary sales surtax, on aircraft sold, delivered, used, or stored in the state unless a specific statutory exemption applies. Working with an aviation tax advisor before closing helps identify applicable exemptions and builds a documentation trail to support your position if the Florida Department of Revenue conducts an audit.
How does the loan structure affect my depreciation strategy?
Significantly. With a direct loan, you are treated as the aircraft owner for tax purposes and may claim 100% bonus depreciation (permanently available for qualifying business aircraft acquired and placed in service after January 19, 2025) and Section 179 deductions, subject to the 50%+ qualified business use requirement.
With a tax or operating lease, the lessor retains the depreciation. With a capital or non-tax lease, you as lessee are treated as economic owner and may claim depreciation. An aviation tax advisor should review the proposed loan structure before signing to confirm it aligns with your tax goals.
What additional documentation is required when an LLC owns the aircraft?
When an aircraft is registered under an LLC or special purpose entity, the lender typically requires a Secretary of State printout confirming the entity is in active good standing, the operating agreement, and guarantor documentation linking the LLC to individual borrowers. The FAA registration must reflect the correct legal name of the entity owner; discrepancies between the registration and the actual entity name can create title and financing complications.
Aviation entity formation and loan documentation planning should happen simultaneously. Leasing an aircraft to a related entity does not automatically shield the transaction from Florida sales and use tax obligations under Chapter 212, Fla. Stat.