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Sales Tax Changes for Charter Aircraft in Illinois

 

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Starting January 1, 2014 the state of Illinois has changed the rules for owners wishing to place their aircraft into a charter operation in order to avoid paying the states sales tax on the purchase of an aircraft.  The Rolling Stock Exemption prior to this year has used a “regular and frequent” guidelines to determine charter use and has been , at times, a point of contention for owners because the guidelines were not clearly defined.  Past rulings had allowed charter usage to dip as low as 25% and still qualify for the Rolling Stock Exemption.  A text of this new law can be seen on the state’s web site at the following link:

http://www.ilga.gov/legislation/publicacts/98/PDF/098-0584.pdf

Please keep in mind that this rule only applies to aircraft acquired on or after 1/1/14.  All aircraft purchased prior to this year fall under the old rules.  As with all tax law changes we advise that you consult with your tax advisor for the handling of your personal taxes.  However, JA is committed to providing the best possible charter management scenarios to our customers and have suggestions that may work to avoid paying the state sales tax.  Feel free to call or email me to discuss how this may effect your future purchase: sfank@jaair.com