Tennessee Sales Tax on Aircraft

Mooney Fan

Mooney Fan

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Sep 17, 2017
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Indian Mound, TN
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Mooney Fan
I have a question for anyone who may have gone down this road. I purchased my aircraft from an individual in Minnesota and did not pay a sales tax. My plane is hangared in Kentucky although I reside in Tennessee. Received a letter from the tax folks in TN wanting to know many details about the sale. Bottom line, 7% tax on sales price

Q- As a TN resident, is it typical to pay sales tax on a plane not based in the state? The form specifically talks about if the A/C is domiciled in TN state tax apples.

Thanks
 
I’d....never mind
 
Seems TN is very aggressive about going after this sales tax. If you register it in a corp entity then later decide to re-register it in your own name, they will want their 7% again. Can't help on your question of it based out of state.
 
The state you (or your LLC) reside in is irrelevant. Sales or use tax are usually assessed in the state where an aircraft is primarily based. If you purchase it in state, you pay sales tax. If you purchase out of state in a tax exempt sale there, you pay use tax in the state the aircraft if primarily based.
 
My question is more tactical, how did these people know your plane was there?
We’re you pumping gas on your actual tail number?
Did you tell the people you were renting the hangar from your tail number, which was none of their business?
 
James331 said:
My question is more tactical, how did these people know your plane was there?
We’re you pumping gas on your actual tail number?
Did you tell the people you were renting the hangar from your tail number, which was none of their business?
Click to expand...

FAA registry -- there is a considerable business in tracking n-number transactions at Oklahoma City.
 
I don't know those States laws but I had a similar situation. Bought plane in Florida. Took it to Oregon and hangared it there. I'm a Washington resident. Couple years later Washington tracks me down and wants money. I was expecting it eventually and had all the documentation ready to go. While I did fly it in Washington a few times, I never bought gas or paid a tie down there. That let me off the hook.
 
James331 said:
So registered the plane in the wrong state?
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He lives in TN. His address on the registration is TN. The plane is based KY. But when KY catches up with him they have a personal property tax for aircraft based in KY.
 
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Clip4 said:
He lives in TN. His address on the registration is TN. The plane is based KY. But when KY catches up with him they have a personal property tax for aircraft based in KY.
Click to expand...

I’ll stick to my statement:)
 
State sales and use tax is a complicated area and each state is different and has different rules and interpretations. My suggestion is consult with a tax attorney or a CPA in Tennessee.
 
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