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Buying an aircraft can open up new levels of flexibility and convenience. But it can also bring significant tax consequences if you’re not careful. Sales and use taxes vary by state, and depending on where and how you buy, you could face a hefty bill or avoid it entirely. Fortunately, some states, including Florida, offer exemptions that can significantly reduce your tax exposure. At AvTax Advisors, PLLC, we help clients across the country take advantage of those opportunities.
In this blog, we’ll look at how Florida and other states handle aircraft sales tax, what you need to qualify, and why pre-purchase planning matters.
Florida’s Sales & Use Tax Exemptions
Florida is one of the most favorable states for aircraft buyers, especially nonresidents. The state offers several key exemptions that, if handled correctly, can eliminate or reduce the 6% sales tax.
Here are some of the most common options:
- 10-Day Fly-Away Exemption: If you’re a nonresident, you may avoid Florida sales tax by taking delivery of the aircraft in Florida and flying it out of the state within 10 days.
- 20-Day Repair or Modification Rule: If the aircraft remains in Florida beyond the 10 days solely for repairs or modifications, you can extend the exemption up to 20 additional days after the repairs are complete.
- Interstate Commerce Exemption: Aircraft used in interstate commerce or leased to others for that purpose may qualify for tax exemption.
- Fractional Ownership Sales Tax Cap: Florida imposes a cap on sales tax for fractional interests in aircraft, which can result in significant savings.
To preserve these exemptions, you’ll need to follow the rules precisely and keep thorough documentation of flight logs, invoices, and delivery details.
Other State Considerations: Texas, New York, and California
While Florida offers strong options, it’s not the only state worth considering. Here’s how a few other aviation states compare:
- Texas: Offers tax exemptions for aircraft purchased for resale or under certain leasing structures. It’s a popular choice for buyers using aircraft for business or resale purposes.
- New York: Provides a full exemption from sales and use tax for general aviation aircraft, including helicopters. This makes New York one of the more tax-friendly options in the Northeast.
- California: Has narrow exemptions and applies use tax broadly. To avoid tax, buyers often must prove that the aircraft was first used and based outside California. Flight logs and detailed recordkeeping are a must.
Each state’s rules differ, and a mistake in timing or documentation can cost thousands. We help clients understand which location best aligns with their goals.
Qualification Requirements and Common Pitfalls
Exemptions sound great on paper, but qualifying takes planning and precision. Here are a few key requirements to keep in mind:
- You must meet strict timing rules. For example, when the aircraft is delivered and where it’s first flown.
- “Use” is broadly defined, and even a test flight or fueling in the wrong location can trigger tax liability.
- Documentation is critical, including flight logs, invoices, and signed affidavits.
Common mistakes include flying the aircraft before leaving the state, using it for business prematurely, or failing to document its location. Buyers can lose exemptions over issues that could have been avoided with one planning call.
Pre-Purchase Planning and Structuring Opportunities
The best time to start thinking about the taxes is before you buy. At AvTax Advisors, we work with buyers and their teams to set up the right structure from the start.
Here are some of the ways we help:
- Entity Formation: We often recommend purchasing the aircraft through an LLC or corporation for liability and tax reasons.
- Leasing Structures: Leasing the aircraft to another party or entity can support exemption claims in some states.
- Multi-State Planning: We review your flight habits and help you choose a tax-friendly jurisdiction based on real-world use.
- Deal Timing: We coordinate with escrow agents and sellers to ensure delivery and first use happen under the right conditions.
Getting this right can save you tens of thousands of dollars or more. We help make sure you don’t leave that money on the table.
Talk to Us Before You Buy
If you’re preparing to purchase an aircraft, now is the time to speak with aviation counsel. At AvTax Advisors, PLLC, we help buyers reduce risk and structure transactions with tax savings in mind. One missed deadline or incorrect logbook entry can trigger tax liability. Let’s make sure that doesn’t happen to you. Contact us before you close—smart planning starts early.