Property taxes on private aircrafts are enforced in twenty states, including California. However, determining where your plane is assessed for property taxes may be confusing, if your plane is located in several places throughout the year. Which state collects the property taxes on your aircraft? Do you need to pay property taxes to multiple states?
Property taxes are assessed on the actual site of the aircraft, rather than the owner’s address. An owner of a private aircraft may still have to pay property taxes, even if they live in a jurisdiction with no personal property tax. Therefore, when determining where to base an aircraft, it is important to consider whether that specific jurisdiction assesses personal property tax.
Since a plane may be hangered in several locations in any given year, the property tax is determined on a lien date predetermined by the local government. This does not mean that a plane can be moved to another state on that specified date to avoid the tax; nor does it mean that a plane temporarily located in another state will be subject to the state’s tax. The general law states that an aircraft will be subject to personal property taxes if the aircraft has a permanent location within the taxing jurisdiction.
The rules and regulations for each state that has personal property taxes vary quite a bit; as a result, it is important to determine where to hangar a private aircraft. In California, property taxes for private aircrafts are due on January 1 and are delinquent on August 31. California’s property tax is based on a specified percentage of the plane’s fair market value, which is evaluated and determined annually. This is one reason to ensure the true value of the aircraft is in line with published guidance.
Owning or purchasing a plane is exciting, but property taxes can significantly increase the costs of owning the plane. Please feel free to contact your L&B professional at 858-558-9200 if you have any questions.