TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 152
AIRCRAFT USE TAX
SECTION 152.101 NATURE OF THE AIRCRAFT USE TAX
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.)
 | TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 152
AIRCRAFT USE TAX
SECTION 152.105 BASIS AND RATE OF THE TAX
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.
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 152
AIRCRAFT USE TAX
SECTION 152.110 RETURNS AND PAYMENT
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.
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CHAPTER I: DEPARTMENT OF REVENUE
PART 152
AIRCRAFT USE TAX
SECTION 152.115 NONTAXABLE TRANSACTIONS
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.
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