Helpful Amendments to Florida Sales and Use Tax Laws
Florida has recently made changes to its sales and use tax laws that will affect - in a positive way - owners and operators of aircraft.
Florida assesses a 6% sales tax on tangible personal property sold in Florida or used in Florida. The sale of an aircraft in Florida will attract Florida sales tax in the absence of an exemption. Although Florida does provide a number of aviation-related exemptions, there have been proposals to either cap or reduce the tax rate for aircraft to make Florida more competitive with neighboring states. Although the recent Florida amendments don’t go as far as some would have liked – they don’t, for instance, contain the broad tax cap that was sought and obtained by the yachting industry - they are helpful nonetheless. The amendments affecting aircraft (described in a recent Florida Department of Revenue publication) include:
- A cap of $300 on the tax that can be imposed on the sale or use of a fractional ownership interest in a fractional aircraft ownership program. Note that the fractional program must meet the requirements of FAR Part 91K, and also that the fractional program must have at least 25 aircraft in its fleet. In addition, the sale to or use by a fractional program manager operating a qualifying fractional program of any parts or labor used in the completion, maintenance, repair or overhaul of a fractional program aircraft also will be exempt from Florida tax (subject to registration and certification requirements).
- A 20-day use tax exemption. This exemption allows a nonresident of Florida to avoid Florida use tax on his or her aircraft, so long as the aircraft enters and remains in Florida for no more than a total of 20 days during the 6-month period after the date of its purchase. Florida already presumes that an aircraft used in another state or territory of the United States or in the District of Columbia for six months or longer before being brought into Florida is not subject to use tax in the state. Under the new exemption, the number of days the aircraft remains in Florida only for flight training, repairs, alteration, refitting or modifications does not count against the 20-day limit. The 20‑day exemption was intended to address concerns that the lack of clarity in the Florida use tax law was deterring aircraft owners and operators from using their aircraft to visit Florida.
The Florida amendments came into effect on July 1, 2010.
