Tax on Aircraft

              Effective July 1, 2003, the acquisition of
aircraft by gift, donation, transfer, or
non-retail purchase is a taxable transac-tion
if the aircraft will be used in Illinois.
Note: For the purposes of this bulletin,
the term “non-retail purchase” means a
purchase from a person or business
that is not in the business of selling
aircraft at retail.
Generally, two groups are affected by
these changes —
individuals, businesses, and
other entities using an aircraft in
Illinois that was acquired by gift,
donation, transfer, or non-retail
purchase; and
lessors engaged in the business
of leasing or renting aircraft and
who sell a used aircraft in connec-tion
with that business to a pur-chaser
who will use the aircraft for
his or her own use.
Individuals, businesses, and other
entities should read the section in this
bulletin titled, “Aircraft Use Tax.”
Lessors should read the section in this
bulletin titled, “Sales of Aircraft by
Lessors.”
How is “aircraft” defined?
For the purposes of this bulletin, the
term “aircraft” includes airplanes,
helicopters, hot-air balloons, ultra
lights, gliders, blimps, dirigibles, sea-planes,
and anything else defined as
aircraft in Section 3 of the Illinois
Aeronautics Act.
Tax on Aircraft
FY 2004-06-A
October 2004
Illinois Department of Revenue
Informational Bulletin
For information
or forms...
To:
1 Individuals, businesses, or other entities acquiring aircraft
through gift, donation, transfer, or non-retail purchase
2 All aircraft lessors
This bulletin supersedes Informational Bulletin FY 2004-06.
Call us at:
1 800 732-8866 or
217 782-3336
Call our TDD
(telecommunications device
for the deaf) at:
1 800 544-5304
Write us at:
Illinois Department of Revenue
P.O. Box 19044
Springfield, IL 62794-9044
Visit our Web site at:
www.ILtax.com
Call
our 24-hour
Forms Order Line at:
1 800 356-6302
Brian A. Hamer
Director of Revenue
Printed by authority of the State of Illinois
250 copies - 6/04 - P.O. Number 2031345
Aircraft Use Tax
You must pay Aircraft Use Tax if you
use an aircraft in Illinois that was
acquired by gift, donation, transfer, or
non-retail purchase.
On what amount must Aircraft
Use Tax be paid?
You must pay Aircraft Use Tax on
either the aircraft’s purchase price or
fair market value.
If you acquire the aircraft by pur-chase
from a person or business
that is not in the business of selling
aircraft at retail, you must pay tax
on the aircraft’s purchase price. If
the aircraft’s purchase price is less
than the fair market value, you must
pay tax on the aircraft’s fair market
value on the date acquired or the
date brought into Illinois, whichever
is later.
If you acquire the aircraft by gift,
donation or transfer, you must pay
tax on the aircraft’s fair market
value on the date acquired or the
date brought into Illinois, whichever
is later.
If you acquired and used the aircraft
outside Illinois before you brought it into
Illinois, you will receive a credit for tax
properly due and paid to another state.
Note: You may not receive credit for
any aircraft that you used as a trade-in.
What is the tax rate?
The tax rate is 6.25 percent of the
purchase price or fair market value,
whichever is greater.