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Q: Tax and charges on purchase of new airplane: ( Answered 5 out of 5 stars,   1 Comment )
Subject: Tax and charges on purchase of new airplane:
Category: Miscellaneous
Asked by: clicker5-ga
List Price: $85.00
Posted: 05 Aug 2003 15:34 PDT
Expires: 04 Sep 2003 15:34 PDT
Question ID: 240449
When a new airplane is purchased in Los Angeles County, California.
What taxes and government charges, would be involved in the purchase,
and what would the approximate dollar amount, and or the percentage be?

New aircraft value (approximately):  $200,000.00
Aircraft will be for personal use only (no business use).

County tax and or charges?
State tax and or charges?
Federal tax and or charges?

Also: What would the continuing yearly charges be from the:
County tax and or charges?
State tax and or charges?
Federal tax and or charges?

Request for Question Clarification by missy-ga on 06 Aug 2003 13:46 PDT

I just wanted to let you know that I'm working on your question, and
am very nearly done.  I'm waiting on a return call from an FSDO
Inspector in Los Angeles.

Just wanted to let you know that progress is being made, it's just
taking a bit of time!

Subject: Re: Tax and charges on purchase of new airplane:
Answered By: missy-ga on 06 Aug 2003 16:57 PDT
Rated:5 out of 5 stars
Clicker!  Hi!

It's nice to see you back!  

You certainly presented us with something of a stumper, at least for a
little while.  Have you ever tried wading through government web
pages? (Yeesh.)  But a bit of patience while waiting for various
offices to open and/or answer queries and the assistance of a
*wonderful* advisor at the California State Board of Equalization
helped get the information you need.

First, the Los Angeles county taxes.  I spoke with George, a tax
advisor at the California State Board of Equalization in Sacramento:

California State Board of Equalization

According to George, sales or use tax is calculated based on where
your aircraft will be hangared.  Sales tax applies immediately when
purchasing your aircraft from a dealer.  Use tax applies when you
purchase it from a private individual - you have up to 13 months from
the time you make the purchase from a private individual to pay the
tax, or until the BOE notifies you that the tax is due, whichever
comes first.

Either sales or use tax will apply, not both.

In Los Angeles County, the sales or use tax is calculated at 8.25%, so
your tax on $200,000 would be $16,500.

George says that's it for county and state taxes - it's the all in one
rate, and there are no recurring sales or use taxes associated with
this purchase.

Additionally, you'll need to register your aircraft with the FAA:

"Send a check or money order made payable to the United States
Treasury in the amount of $5 (U.S. Funds) along with the completed AC
Form 8050-1, Aircraft Registration Application, and Bill of Sale
signed in ink from the last registered owner to the FAA Aircraft
Registration Branch.

Use of an original Aircraft Registration Application, AC Form 8050-1,
is required.  Photocopies and computer-generated copies of this form
are not acceptable for the registration of aircraft.  Aircraft
Registration Applications may be obtained from the Aircraft
Registration Branch or your local FAA Flight Standards District Office
(FSDO). The applicant's physical location or physical address must
also be shown on the application if a post office box (PO box) is
entered as the mailing address.

If more information is needed, call the Aircraft Registration Branch

Phone Number:

(405) 954-3116
Mailing Address:
Aircraft Registration Branch, AFS-750
PO Box 25504
Oklahoma City, OK 73125

Courier Address:
Aircraft Registration Branch, AFS-750
6425 S. Denning
Registry Building, Room 118
Oklahoma City, OK 73169 "

Aircraft registration

I spoke with Bill in the Aircraft Registration office, and he said
that the registration is a one time fee.  There are no recurring
federal fees associated with this registration.

To obtain your registration form, you'll need to go to the FSDO for
Los Angeles county:

2250 E. Imperial Hwy, STE. 140
El Segundo, CA  90245
(310) 215-2150
(310) 645-3768

The Manager is William T. Eyre.  Do note that you *can not* obtain
walk in service.  To pick up your form, you must make an advance
appointment to do so.

Los Angeles Flight Standards District Office

Both Bill and George, as well as fellow Researcher Omnivorous, advised
that there might be state registration fees, much akin to DMV fees. 
Bill suggested I contact the California DMV to determine if you would
be subject to annual registration fees, so I called the Los Angeles
field office of the California Department of Motor Vehicles.

Jean at the DMV laughed.  <*grin*>  

"No, that's not the kind of vehicle we register!"

(It took quite a lot of time just to get through, but it was nice to
get someone on the other end who wasn't surly!)

I called the Los Angeles FSDO, noted above.  Inspector John Foulks
took a few minutes to explain that the LAX FSDO deals solely with
whether or not an aircraft has been properly registered with the FAA,
and was not aware of any requirement to register your aircraft with
the State of California.  He suggested contacting the state's
Department of Transportation, which I attempted several times, to no

In desperation, I called Omnivorous-ga, who is a pilot himself, and
asked where he would suggest looking.  Lo, the dear man found a phone
number for the California Department of Transportation's Aeronautics
Division (916-654-4959)!  And they answered the phone!

After a few transfers and some hold time, Andrea in the Aeronautics
Division informed me that the State of California does not require you
to register your aircraft in the same manner as one would register a
car or a boat.  There are no recurring registration fees for your
aircraft or the associated pilot's license, which I've confirmed here:

Pilots' Guide to Taxes:  Income, Personal Property, and Sales & Use
(scroll to the registration chart)  


The State of California levies an annual "personal property" tax on
some personal aircraft.  What your rate of tax will be is determined
by the County Assessor based on a number of factors:

"Boats and aircraft are taxable and are subject to annual appraisal.
Their values are determined by reviewing sales of comparable boats and
airplanes. Information on their locations and ownerships is obtained
from the Department of Motor Vehicles, the United States Coast Guard,
the Federal Aviation Administration, on-site inspections, and other
public and private sources."

Are boats and aircraft subject to property tax?

The Aeronautics Division representative declined to speculate how much
your assessment could total, as it depends on the kind of aircraft you
have.  She said you'll need to discuss that with the County Assessor's

I did find an article in Google's cache estimating the tax on an
aircraft valued at $200,000 to be around $2,200/year:

"An escalating annual tax on a late model aircraft worth $200,000 can
be more than $2,200."

Time to abolish aircraft personal property tax?
by Nubar Doembeleg (via Google's cache)

The following resources might also prove helpful to you:

California Aviation Alliance

Aircraft Owners and Pilot's Association

California Pilot's Association


I hope this answers your question!  If I can be of further assistance,
please just ask for clarification, and I'll be glad to help you.


Search terms:  [ tax "personal aircraft" California ], [ registration
aircraft California ], [ "personal property" tax aircraft California
], [ register aircraft ]...and a lot of time on the phone.
clicker5-ga rated this answer:5 out of 5 stars
Hello missy:
There is more to aircraft taxes than I thought.
Thank you for the 5 star research.   

Also, thanks to omnivorous, for the comment.
Kindest regards,

Subject: Re: Tax and charges on purchase of new airplane:
From: omnivorous-ga on 06 Aug 2003 17:22 PDT

Missy's quoting of California sales tax office officials is correct
but it is neither complete nor is it common or best practices.  That,
of course is not the researcher's fault but rather the fault of state

There are at least two common options in the purchase of aircraft that
HAVE been used in the state of California -- though one may have
disappeared.  Because of this, it is strongly suggested that you
consult a tax consultant.

California had a provision its sales/use tax law at one time that
permitted an aircraft originally purchased and used outside the state
to be registered within the state:
Associated Sales Tax Consultants

California Sales/Use Tax Exemptions

A common vehicle used in virtually every state, even for
privately-owned aircraft, is to have them held by a corporation.  If
the corporation's business is leasing, sales tax is not assessed at
purchase but on the hourly usage charge assessed for airplane usage. 
Note that a tax expert should be consulted because the calculation
should include all charges, including accrual towards engine overhaul.
 One also has to be very careful to set up the legal mechanisms --
which are not complex -- AHEAD of the purchase.

There are other options, but they tend to be rarer.

This is a difficult area because experience has taught me that few
accountants and few lawyers are familiar with the peculiarities of
dealing with aircraft, particularly since the depreciation and hourly
charge have to accrue annual inspection and overhaul costs.

A strong suggestion for further research would be to contact AOPA and
pilots' organizations such as the Mooney Aircraft Pilots Association
or Cessna Pilots Association.

Best regards,


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