SALT Report 1850 – The Colorado Department of Revenue updated their sales and use tax FYI regarding exemptions for aircrafts and aircraft parts. Generally, aircraft used for interstate commerce by a commercial airline and any parts permanently affixed to aircraft are exempt from sales and use tax as provided in §39-26-711, C.R.S.. The exemption applies to state, Regional Transportation Districts, Scientific and Cultural Facilities Districts, and county and state-collected local taxes.
Sales to Non-Residents
Sales of new or used aircraft are exempt if the following three conditions are met:
- The aircraft is sold to a nonresident of Colorado,
- The aircraft will be removed from the state within 120 days after the date of the sale, and
- The aircraft will not be in Colorado more than 73 days in any of the three calendar years following the calendar year the aircraft is removed from Colorado
To claim the exemption, purchasers must provide an affidavit to the seller stating that the purchaser is not a resident of Colorado and that they will pay sales tax on the purchase if they do not remove the aircraft from Colorado within 120 days or if they fail to comply with the requirement that the aircraft not be in the state more than 73 days in any of the three calendar years following the calendar year it was removed from the state.
The sales and use tax exemption for aircraft parts applies to parts that are permanently affixed to the aircraft. This includes fuselage parts, parts for the aircraft’s engine, seats permanently affixed to the aircraft, and paint for the aircraft.
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