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The Pilot's Guide to TaxesThe Pilot's Guide to Taxes

Note to Members

The information in this guide outlines basic tax issues for general aviation light aircraft owners and pilots. This subject report was written by Ray Speciale, who is a lawyer/CPA employed of Counsel by Yodice Associates (AOPA's Pilot Counsel), a law firm based in Frederick, Maryland. Ray is also an active pilot and flight instructor. The author gratefully acknowledges the assistance of Teresa Bazaral, Esq., in the preparation of the "Income Tax" section.

As always, you are urged to contact your tax advisor for answers specific to your tax situation. If you need help finding a tax professional with aviation experience in your area, call AOPA's Pilot Information Center at 800/USA-AOPA (872-2672). AOPA is not authorized to provide tax advice.

Overview

Over the years, AOPA has fielded numerous questions related to tax issues affecting aircraft owners and pilots. This publication is an attempt to review the basics related to income taxes, sales and use taxes, and personal property taxes as they might affect AOPA members.

Part 1 deals with income tax issues. This part is divided into different sections addressing issues related to aircraft expenses, flight training expenses, the "hobby loss" rule, and aircraft leasing. There is also a question and answer section addressing some of the more frequently asked income tax questions.

Part 2 tackles the basics of sales and use tax issues. Members purchasing aircraft are particularly concerned with potential liability for sales and use taxes. In this part of the booklet, we will explain the difference between sales and use taxes. A question and answer section with frequently asked questions follows.

Part 3 reviews the essentials of personal property taxes and registration fees. In this section, we have also included a listing of states that impose personal property taxes and/or registration fees.

It is important to keep in mind that this report will only provide you with general information regarding tax issues that could affect you as an aircraft owner and pilot. We urge you to consult with a tax professional regarding your specific tax questions. The report contains various citations and other resources to assist you and your tax professional.

Part 1 – Income Tax

Part 2: Sales & Use Tax

Part 3 – Personal Property Taxes