- When aircraft can be sold or purchased tax exempt
- What you can buy tax exempt
- When use tax is due
- Purchases by aircraft dealers
- Aircraft leases
- How tax applies to aircraft used for flight instruction
- How tax applies to aircraft used for flying services
- Applying tax to runways (instead of roads)
- For more information
- Idaho Division of Aeronautics registration information »
If you're thinking of buying or selling an aircraft in Idaho, you may have some questions about registration and taxes. The Idaho State Tax Commission and the Idaho Division of Aeronautics have partnered to provide you the information you need to help make your aircraft transaction (sale, lease, or purchase) and registration a success.
There are some cases in which the sale of an aircraft may be exempt.
- The customer is exempt from all taxes (like the U.S. government).
- The aircraft will be used primarily to transport passengers or freight for hire.
In this case the exemption applies to:
- Commercial airlines,
- Air ambulance services, and
- Charter flight businesses.
- Hot air balloons,
- Gliders, and
- Other recreational craft.
- Aircraft sold to nonresidents — even if delivery is taken in Idaho — if the buyer certifies that the aircraft:
- Will be taken directly out of Idaho and immediately registered in another state or nation, and
- Won't be required to be registered under Idaho laws, and
- Won't be used or stored in Idaho more than 90 days in any 12-month period.
- Aircraft purchased by aircraft dealers for resale (see Resale Exemption).
If you're a registered dealer making a purchase for resale, you must give your supplier a completed form ST-101. Once the supplier has your ST-101 on file, you can buy aircraft and any parts needed for their repair exempt from tax, as long as the items are held in inventory for resale.
As a retailer, you can sell an aircraft, its repair parts, and oil exempt from sales tax if your customer is holding the aircraft for resale, rental, or lease in the normal course of business. In this case, your customer must provide you a completed form ST-101.
Use tax is a tax on goods that you put to use or store in Idaho. If you haven't paid sales tax on these goods, you owe use tax (unless the items are held for resale or an Idaho exemption applies). If you've paid the correct sales tax to another state — at least equal to or greater than Idaho's tax — you don't owe use tax. The sales tax must be separately stated on your receipt. The use tax rate is the same as the sales tax rate. Use tax is paid to the state using Form 850-U, Idaho Self-Assessed Use Tax Worksheet and Return.
You must pay tax when you buy items that will be used by your business rather than being held for resale. If your vendor didn't charge sales tax, you owe Idaho a use tax. Any item you originally purchased for resale but withdrew from inventory for business or personal use is also subject to use tax. You pay use tax to the state using your regular sales tax return.
If the sale of the aircraft is considered taxable, then the lease of the aircraft is also taxable. For more information on leases, see Brochure #11, Rental and Leasing Firms.
Aircraft used primarily for flight instruction aren't considered to be held for resale, so their purchase is taxable (as are their parts and oil). When aircraft held for resale are used for flight instruction, a reasonable fair rental value must be established for the aircraft use, and the business giving the instruction must pay use tax on that value.
The purchase of the flight instruction by a student isn't subject to sales tax.
The purchase of aircraft used primarily for flying services, such as recreational flights, is taxable (as are the aircraft parts and oil). Recreational flights include balloon rides, sightseeing, wildlife viewing, and similar activities.
The Division of Aeronautics uses aircraft engine fuel tax, included in the price of aviation gas and jet fuel, to support Idaho airports and aviation programs. However, some airplane owners have their planes certified to use motor vehicle gas ("mo-gas"). The tax on "mo-gas" goes to support Idaho roads. If you'd like to support Idaho runways, you can claim a refund of the motor fuels tax and then pay the aircraft engine fuel tax.
To do this, file an annual Form 75, Idaho Fuels Use Report, and include it with your income tax return. (You must buy at least 50 gallons of motor vehicle gas to claim a refund using Form 75.)
- Idaho Code sections 63-3608, 63-3609, 63-3610, 63-3611, 63-3622GG, 36-6312, 36-3614
- Sales Tax Administrative Rule 037: Aircraft and Flying Services
- Sales Tax Administrative Rule 038: Flying Clubs