Section 152.101  Nature of the Aircraft Use Tax

 

a)         The Aircraft Use Tax is a privilege tax imposed on the privilege of using, in this State, aircraft as defined in Section 3 of the Illinois Aeronautics Act.  The tax applies to aircraft acquired by gift, transfer, or non-retail purchase after June 30, 2003.  The tax is imposed on the use of aircraft in this State regardless of whether the aircraft is actually registered under the Illinois Aeronautics Act.  Examples:

 

1)         An aircraft that is acquired by non-retail purchase outside of Illinois prior to June 30, 2003 and is brought into Illinois after June 30, 2003 is not subject to the tax imposed by this Part.

 

2)         Fractional share ownership in an aircraft would be subject to tax if the plane were used in Illinois.

 

3)         A multi-state corporation leases a corporate aircraft from a related entity to transport its corporate executives on business travel throughout the United States. The aircraft is registered and hangered outside Illinois.  As part of a corporate restructure, ownership of the aircraft will be moved to a new entity.  The transfer of both possession and ownership of the aircraft will occur outside Illinois after June 30, 2003 and the transfer of the aircraft to the new entity will qualify as a tax-free capital contribution under the Internal Revenue Code. After completion of this restructuring the aircraft will be based in Illinois.  This transfer is a taxable event in Illinois and Aircraft Use Tax is incurred.

 

b)         "Aircraft" means any device used or designed to carry humans in flight as specified by the Department of Transportation by rule. All devices required to be licensed as "aircraft" by the Federal Aviation Administration (FAA) are "aircraft". [620 ILCS 5/3]  Under Department of Transportation rules, aircraft is defined to mean any contrivance now known or hereafter invented, used or designed for navigation of or flight in the air.  (See 93 Ill. Adm. Code 14.10.)

 

Section 152.105  Basis and Rate of the Tax

 

a)         The rate of tax shall be 6.25% of the selling price for each non-retail purchase of aircraft that qualifies under this Part.

 

b)         Tax shall be imposed on the selling price of an aircraft.  However, the selling price shall not be less than the fair market value of the aircraft on the date the aircraft is purchased or the date the aircraft is brought into the State, whichever is later.  Trade-ins are not allowed to be credited against the tax base.

 

c)         For purposes of calculating the tax due when an aircraft is acquired by gift or transfer, the tax shall be imposed on the fair market value of the aircraft on the date the aircraft is acquired or the date the aircraft is brought into the State, whichever is later.

 

d)         For purposes of this Section, "selling price" means the consideration received for an aircraft subject to the tax imposed by this Section valued in money, whether received in money or otherwise, including cash, credits, service or property.  In the case of gifts or transfers without reasonable consideration, "selling price" shall be deemed to be the fair market value as determined by the Department or the Department’s vendor.  For the purpose of assisting in determining the validity of the "selling price" reported on returns filed with the Department, the Department may furnish the following information to persons with whom the Department has contracted for service related to making that determination: the selling price stated on the return; the aircraft identification number; the year, the make, and the model name or number of the aircraft; the purchase date; and the hours of operation (Section 10-30).  Hours of operation means aircraft hours or airframe hours.

 

Section 152.110  Returns and Payment

 

a)         The purchaser, donee or transferee shall file a return signed by the purchaser, donee and transferee with the Department of Revenue on a form prescribed by the Department.  The Department may request that the FAA bill of sale and the purchase agreement or invoice be filed with the return.

 

b)         The return and payment from the purchaser, donee, or transferee shall be submitted to the Department within 30 days after the date of purchase, donation, or other transfer or the date the aircraft is brought into the State, whichever is later.

 

c)         Such return and payment shall be a condition to securing registration of the aircraft from the Division of Aeronautics of the Department of Transportation.

 

Section 152.115  Nontaxable Transactions

 

a)         The tax does not apply:

 

1)        if the use of the aircraft is otherwise taxed under the Use Tax Act [35 ILCS 105];

 

2)        if the aircraft is bought and used by a governmental agency or a society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes.  An active Department issued exemption number is required to document this exemption;

 

3)        if the use of the aircraft is not subject to the Use Tax Act by reason of subsection (a), (b), (c), (d), or (e) of Section 3-55 of that Act dealing with the prevention of actual or likely multistate taxation; or

 

4)         if the transfer is a gift to a beneficiary in the administration of an estate and the beneficiary is a surviving spouse.

 

b)         Certification required to document exemption.  A claim that a transaction is nontaxable under this Section must be supported by a certification indicating either payment of Use Tax, an active Department issued exemption number or surviving spouse beneficiary information. The certificate must be executed by the transferee, purchaser or donee and submitted at the time of filing the return. The Department may include the certification on the return.  The certification must include the transferor, seller, or donor's name and address, the transferee, purchaser or donee's name and address, and a statement that describes the nature of the exemption.