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Legally Avoiding State Taxes When Purchasing an Aircraft

Posted by Alyson Wuamett on Dec 11, 2014 1:20:00 PM

Article By Jeff Wieand; Business Jet Traveler 

state-taxOn airplane purchases, these charges can total millions of dollars, but you might be able to legally avoid them by simply climbing aboard your new jet and taking off.

Sales taxes offer an easy way for states to raise revenue, and business jets are a favorite target. In some places, state and local sales taxes approach 10 percent, so the levy on a $40 million aircraft purchase can be almost $4 million. That’s a number sure to command the attention of both state revenue authorities and airplane buyers.

(Strictly speaking, states have no ability to charge sales tax on purchases that occur outside their borders. Instead, they often charge a compensatory “use tax” on property that is brought into and used in their states.)



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