According to California Law, airplanes and other aircraft are taxable and are subject to annual appraisal.
Information on location and ownership is obtained from the Federal Aviation Administration, Airport owners' and operators' reports, on-site inspections, and other public and private sources.
Aircraft owners are required to file an annual Aircraft Property Statement with the Assessor providing details about the aircraft.
Private aircraft are taxed at the location of the airport or hangar where they are usually kept. Commercial certificated aircraft are taxed on an apportioned basis in each county to which flights are made.
About Aircraft Assessments
The California Constitution (Article XIII, Section 1) requires that all tangible property be taxable unless otherwise exempted by the Constitution or by the legislature. Tangible personal property is any property, except land or improvements, that may be seen, weighed, measured, felt, or touched, or which is in any other manner perceptible to the senses. Aircraft are considered tangible and are taxed as personal property.
The California Revenue and Taxation Code requires the annual assessment of non-commercial aircraft as of January 1.
Revenue and Taxation Code 5301; Revenue and Taxation Code 5362; Revenue and Taxation Code 5365; Revenue and Taxation Code 5367
How The Assessor Locates Aircraft
The county assessor receives airplane ownership information from the State Board of Equalization, other counties, the Federal Aviation Administration, reports from airport operators and periodic review of all airports in the county.
Filing an Aircraft Property Statement
What Must be Reported
Aircraft owners are required to file an Aircraft Property Statement providing information about the aircraft such as the serial number, make, model, year of manufacture of the aircraft, and engine and maintenance information, including the total hours logged on the aircraft following the last major overhaul of the engine of the aircraft. This information is used to assess the current market value for tax purposes.
[California Revenue and Taxation Code sections 5362; 5365; 5367]
How Aircraft is Valued
Once the Aircraft Property Statement is filed, the Assessor uses that information to determine the value of the aircraft considering such things as purchase price, avionics, condition, recent sales of comparable aircraft, and nationally published value guides.
[Revenue and Taxation Code section 5365]
An annual Aircraft Property Statement must be filed with the Assessor on or before April 1. Failure to return the form by the specified due date will require the Assessor to add a 10% penalty to the market value of your aircraft.
[California Revenue and Taxation Code section 5367]
How Often Your Aircraft is Assessed
State law requires that aircraft be assessed on the January 1 lien date annually at the situs (location) where they are regularly or habitually situated at the airport where it spends the most ground time in California.
The Aircraft Property Statement is not a public document. The information you provide will be held secret by the Assessor. It can only be disclosed to the district attorney, grand jury, and other agencies specified in section 408. Attached schedules are considered to be part of the statement.
[California Revenue and Taxation Code sections 408; 451]
If You Sold or are Selling Your Aircraft
If You Sold Your Aircraft After January 1
Even though you may no longer own the property, you are still liable for the taxes because you owned it on the January 1 lien date. When taxable personal property is sold subsequent to the lien date, it is the duty of the seller to pay the taxes on the property for the ensuing fiscal year.
If You Sold Your Aircraft Before January 1
The new owner will be responsible for paying the taxes for the new tax year. If the county assessor has not received the necessary sales information from the FAA, you may receive an assessment notice informing you of the assessed value of the aircraft. If you receive this notice, you should contact the county assessor with the new owner's name and address, date of sale, location of the aircraft, and FAA assigned "N" number.
If Your Aircraft is Consigned to a Broker
Aircraft on consignment that is held in inventory for sale by a licensed dealer on January 1 qualifies for the business inventory exemption and, therefore, is not subject to property taxes.
Aircraft Out of the County on January 1
Temporarily removing an aircraft from the county on the January 1 lien date will not exempt it from property taxes if it is regularly or habitually located in that county.
Taxes on Tie Downs
Private use of public property is taxable under certain conditions.
If you rent or lease a tie down from a city or the county, you may receive a property tax assessment if:
- You are using facilities owned by a government agency (city, county, state, school district, etc.)
- Your right to use government-owned property is independent, durable and exclusive
- You are not a government agency
Aircraft of Historic Significance
This exemption provides a property tax exemption for "Aircraft of Historical Significance" defined as "any aircraft which is original, restored, or a replica of a heavier than air powered aircraft which is 35 years or older, or any aircraft of a type or model which there are fewer than five in number known to exist worldwide."
Aircraft for Display
This exemption provides a property tax exemption for aircraft that is made available for display in an aerospace museum.