California aircraft tax comes in two layers. You pay sales or use tax once when you buy the plane or bring it into the state, starting at 7.25% of the purchase price plus any local district add-ons. Then, every year the aircraft is based here, the county assessor bills you property tax on its current market value at roughly 1% plus voter-approved overrides. Several exemptions can shrink both bills, and a federal depreciation rule restored in 2025 can offset a large piece of the purchase tax for business owners.
Sales Tax vs. Use Tax on the Purchase
Buy from a California dealer or private party and you owe sales tax. Buy outside California and bring the aircraft in and you owe use tax. Either way the statewide base is 7.25%, and district taxes at your hangar location can push the effective rate above 10% in some areas.1California Department of Tax and Fee Administration. Tax Rate FAQ for Sales and Use Tax The California Department of Tax and Fee Administration collects both.2California Department of Tax and Fee Administration. Tax Guide for Purchasers of Aircraft
Use tax exists to stop buyers from dodging California rates by closing the deal in a lower-tax state. The critical fact for out-of-state buyers is where the aircraft was “first functionally used,” because that governs which set of rules the CDTFA applies to you.
The 12-Month Presumption for Out-of-State Buyers
If you buy an aircraft outside California and bring it into the state within 12 months of the purchase date, California presumes you bought it for use here. Under Revenue and Taxation Code Section 6248, the presumption is triggered in three situations:3California Department of Tax and Fee Administration. California Revenue and Taxation Code 6248 – Presumption of Purchase for Use
- You’re a California resident, including a closely held corporation or LLC where 50% or more of the ownership interests are held by California residents.
- The aircraft is subject to California property tax during the first 12 months of ownership.
- You’re a nonresident, but the aircraft is used or stored in California more than half the time during those first 12 months.
The presumption is rebuttable, but the burden is on you and the CDTFA looks at these claims carefully. Note the actual window: the operative period is 12 months, not the 90 days sometimes cited in older secondary sources.
The Interstate and Foreign Commerce Exclusion
A separate rule can keep you out of use tax entirely. If you first functionally use the aircraft outside California and then continue to use it in interstate or foreign commerce both inside and outside the state, entry into California within 12 months won’t count as purchase for California use, provided at least half of the aircraft’s flight time during the six months right after it enters the state is spent in interstate or foreign commerce.4California Department of Tax and Fee Administration. Exemptions and Exclusions: Vehicles, Vessels, Aircraft This is measured in flight hours, not calendar days, so complete and consistent flight logs are what make or break the claim.
Credit for Tax Paid to Another State
If you already paid sales or use tax to another state on the same aircraft, California credits it dollar-for-dollar against California use tax due.2California Department of Tax and Fee Administration. Tax Guide for Purchasers of Aircraft Pay $15,000 elsewhere against a $20,000 California bill and you owe California $5,000. If the other state’s rate was lower, you make up the difference.
Common Carrier Exemption
Revenue and Taxation Code Section 6366 exempts aircraft sold to a person who uses it as a common carrier of people or property under federal, state, or foreign government authority.5California Department of Tax and Fee Administration. California Revenue and Taxation Code 6366 – Aircraft Sold to Common Carriers, Foreign Governments, and Nonresidents To qualify, common carrier use must be more than 50% of the aircraft’s operational use during the first 12 consecutive months.4California Department of Tax and Fee Administration. Exemptions and Exclusions: Vehicles, Vessels, Aircraft
The statute also builds in a revenue floor. You are presumed not to be operating as a common carrier if yearly gross receipts from common carrier operations don’t exceed 20% of the aircraft’s purchase price or $50,000, whichever is less.5California Department of Tax and Fee Administration. California Revenue and Taxation Code 6366 – Aircraft Sold to Common Carriers, Foreign Governments, and Nonresidents Compensation paid by the owner or related parties doesn’t count toward gross receipts. In practical terms, a $2 million aircraft needs to generate at least $400,000 in annual common carrier revenue, or the owner needs strong independent evidence, to keep the exemption intact.
Annual Property Tax on Aircraft
Every aircraft based in California owes annual ad valorem property tax. The Legislature set up a uniform countywide system under Part 10 of the Revenue and Taxation Code so aircraft are taxed consistently across the state.6California Legislative Information. California Revenue and Taxation Code 5301 – General Provisions and Definitions The lien date is January 1. Whoever owns the aircraft that day is on the hook for the full year’s tax, and the county where the aircraft is habitually situated handles assessment and billing.7California Legislative Information. California Revenue and Taxation Code 5362 – Assessment
Aircraft follow the ordinary California property tax framework: a base rate of roughly 1% of assessed value plus locally voted overrides. Unlike real estate under Proposition 13, though, the assessed value is the aircraft’s current market value each year, so the bill moves with age, condition, and the used-aircraft market.
Which County Taxes the Aircraft
Situs is generally the county where the aircraft is based and returns between flights. An aircraft physically present in a county on January 1 that was also based there in one or more prior assessment years keeps taxable situs in that county even if it’s moved before the fiscal year begins. If it has no permanent base on the lien date, situs falls to the county where it normally returns between uses, or the county of the owner’s principal place of business.8California Department of Tax and Fee Administration. Property Tax Annotations – 740.0000 SITUS
How the Assessor Values Your Aircraft
County assessors must use valuation standards prescribed by the State Board of Equalization and are barred from relying on any custom or informal industry method.9Justia. California Revenue and Taxation Code 5362-5367 – Assessment In practice those guides produce a value based on make, model, year, installed avionics, engine hours since the last major overhaul, and overall condition.
Engine time carries real weight. An aircraft nearing its recommended overhaul is worth substantially less than one just out of overhaul, and the assessment should reflect that. The flip side: a recent six-figure overhaul or avionics upgrade pushes value up, so the timing of major work matters for the following year’s tax bill.
Filing the BOE-577 Aircraft Property Statement
When the county assessor requests it, you must file a BOE-577 Aircraft Property Statement giving the information needed to value the aircraft.10California State Board of Equalization. BOE-577 Aircraft Property Statement The form asks for:
- FAA registration number (N-number), manufacturer, model, and year of manufacture.
- Purchase price and date of acquisition.
- Description and cost of added avionics, modifications, or specialized equipment.
- Total hours logged since the last major overhaul.
- General condition, including damage history and deferred maintenance.
Counties typically mail the form in early February, and it’s due back by April 1.11Alameda County Assessor. Non Commercial (Private) Aircraft Filing after May 7 triggers a penalty of 10% of the market value of the unreported aircraft, added directly to the assessed value on the current roll. At that point the assessor will also estimate value rather than use your data, which usually produces a higher number. Filing on time with accurate detail is the cheapest way to control the assessment.
Appealing an Assessment You Think Is Too High
If the assessor’s number looks inflated, you can file a formal appeal with your county’s Assessment Appeals Board. This is worth doing when comparable aircraft are selling well below the assessed value, or when the assessor didn’t account for high engine time, damage history, or other factors that pull market value down. Bring evidence: recent sale prices of comparable aircraft, broker opinions of value, or maintenance records showing deferred work. Appeal deadlines vary by county, so check with the assessor’s office promptly after you receive the notice.
Historical Aircraft Exemption
California offers a full property tax exemption for aircraft of historical significance. The aircraft must be an original, restored, or replica heavier-than-air powered aircraft that is either 35 years old or older, or a type of which fewer than five are known to exist worldwide.12California State Board of Equalization. Aircraft of Historical Significance Exemption – Property Tax
Age alone isn’t enough. All three of the following must also hold:
- The owner is a living person, not a corporation, LLC, partnership, or trust.
- The aircraft isn’t used for commercial purposes or general transportation.
- The aircraft is available for public display at least 12 days during the 12-month period before January 1 of the exemption year.
The claim is due to the county assessor by February 15 for the full exemption. Late claims filed by August 1 receive only 80% of the reduction. The claim must include a certificate of attendance signed by the managers or sponsors of the display events.12California State Board of Equalization. Aircraft of Historical Significance Exemption – Property Tax If you own a warbird or vintage aircraft through an entity, the individual-ownership requirement is a reason to run the numbers on personal ownership instead.
Federal Bonus Depreciation as an Offset
The One Big Beautiful Bill Act, signed on July 4, 2025, permanently restored 100% first-year bonus depreciation for qualified property, including aircraft, acquired and placed in service after January 19, 2025.13Internal Revenue Service. Interim Guidance on Additional First Year Depreciation Deduction A qualifying aircraft can be fully depreciated for federal income tax purposes in its first year rather than spread across the normal MACRS schedule.
The catch: this is a business-use benefit. Purely personal aircraft don’t depreciate at all, and mixed-use aircraft depreciate only in proportion to business use. The paperwork requirements are substantial, and the dollar amounts involved make small errors expensive, so an aviation-experienced tax advisor is worth the fee.