Aircraft ownership and Tax issues

[Bruce W Robida]

Sorry if this has already been discussed. Please direct me to the correct thread if it has been. I am considering buying my first airplane and I am just trying to figure out the process and all the costs associated with the purchase. I know about sales tax and I've recently learned in Georgia, there is a personal property tax (40% of market value plus mileage - average 25 miles). What does that mean? Are there any Georgia aircraft owners here in this group? What other taxes should I expect to pay in Georgia?

 

[Mtns2Skies]

Most states have a "use" tax on an aircraft purchase instead of a sales tax. If you're an AOPA member they have lawyers that can answer these questions and they have several great resources for the aircraft purchasing process.

 

[Bruce W Robida]

Most states have a "use" tax on an aircraft purchase instead of a sales tax. If you're an AOPA member they have lawyers that can answer these questions and they have several great resources for the aircraft purchasing process.

Thanks. I'll check out the AOPA site.

 

[Hang 4]

Think you are referring to the "Millage" rate, not mileage. Millage is a fancy word for the rate, IIRC, you multiply millage by 100 to get to the %. The tax varies by county in Georgia. They will find you BTW. The rates are fairly easily googled. The valuation process is where I suspect things will get interesting. I got out before I had to pay the tax, but I did have to prove I had moved out, along with the plane.

 

[BrianNC]

@wayne might know something about this. I think he has a share in a Cirrus.

 

[kyleb]

Millage rate varies between counties. It is typically 25-30 mill's in Georgia. Meaning the annual taxes on a $100K plane are on the order of:

Value x 40% x milliage rate.

$100,000 x .4 x $25/1000 = $1000.

As mentioned earlier in the thread, the curveball is how you determine the value of the airplane. When I registered my RV-6 the first time, the local tax assessor valued my airplane by looking at Trade A Plane and averaging the asking prices of the RV-6's listed. It took an appointment and some negotiation to get to a realistic value.

Sales tax is typically 6-7%.

 

[MacFly]

The Use Tax is a one-time tax you pay when you buy the plane. It's typically the same as your local sales tax rate. The Personal Property Tax is a tax that you pay annually and varies widely from state-to-state. As you say...in Georgia it's 40% of the market value multiplied by the millage rate. If the average is 25 mills, that means the average personal property tax for that year (it can vary yearly and can vary from county to county, city to city) would be 40% of the purchase price, multiplied by 0.025. A $100,000 airplane would have a property tax of $1000. In this state we don't pay any property tax...instead there's an annual registration fee...IIRC I pay $100/year (airplanes less than $500,000 market value). It's a good deal...actually quite a bit less than the registration fee for any car that I own.

I'd look at that closely....COVID-related decrease in tax revenue is having an effect on many local and state governments and increasing the property tax mill levy is one solution those government agencies might be using to support the shortfall.

 

[Bruce W Robida]

Thank you all for your help. Yes, I now understand that it is millage rate and the tricky part will be calculating the market value. In Georgia, it is 25 mills, or $25 per $1000 of 40% of the market value.

 

[Hang 4]

Thank you all for your help. Yes, I now understand that it is millage rate and the tricky part will be calculating the market value. In Georgia, it is 25 mills, or $25 per $1000 of 40% of the market value.

Check your county's millage rate. It's not one rate for the whole state.

 

[MacFly]

Sometime the mill levy will even vary from town to town, or school district to school district in the same county. It also might be assessed based on where the airplane is hangared rather than where you live.

 

[Bruce W Robida]

Yes, I believe I saw that the tax form asked where the airplane is hangared.

 

[Hang 4]

Sometime the mill levy will even vary from town to town, or school district to school district in the same county. It also might be assessed based on where the airplane is hangared rather than where you live.

That's exactly correct in Georgia. Both the county/city/town and the where the aircraft is hangared.