Washington – Guide on Aircraft Dealer Transactions


SALT Report 2112 – The Washington Department of Revenue updated their excise tax advisory to address certain taxable transactions involving aircraft. Specifically addressed are aircraft purchased for resale and later sold at retail.

Purchased New and Used for Demonstration Purposes

This purchase is subject to use tax if sales tax was not paid at time of purchase.  If the plane is later sold, sales tax must be collected on the full selling price and retailing B&O tax must be reported.  In some cases, the use tax modification can be applied if the aircraft is used for charter flights or training programs.  Any additional planes purchased in the same calendar year and used as demonstrators are also subject to use tax.

Purchased New and Used for Non-Scheduled Air Taxi Services

This purchase is subject to use tax if retail sales tax was not paid at the time of purchase.  Retail sales tax must be collected if the aircraft is later sold.  Any income from the air taxi service is subject to tax under the “other public service business” public utility tax classification.

Purchased Used and Resold Without Being Used

Neither retail sales tax nor use tax is due from the taxpayer based on this type of purchase. However, retail sales tax must be collected if the taxpayer later sells the plane. The gross proceeds from the sale are subject to the B&O tax under the “retailing” classification

Purchased New and Used for Student Training Purposes

Because this purchase will be used for student training, use tax is due.  If the plane is later sold retail sales tax and “retailing” B&O tax is due.  However, subsequent purchases of aircraft during the same calendar year will not be subject to further use tax.

Also, the advisory reflects that the monthly rental charges for out-of-state use by a lessee can no longer be deducted from the retail sales tax and the B&O tax.

For Further Information

Washington Department of Revenue – Excise Tax Advisory #3151.2013


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