Property Tax on Airplane in North or South Carolina

[tdfuller]

Does anybody have any tips on how to legally lower or eliminate the annual property tax burden on an aircraft based in North or South Carolina?

I live in Charlotte (Mecklenburg County), now the highest taxed county in the highest taxed state in the southeast - but base my airplane at Monroe Regional Airport, in neighboring Union County.

Property tax is cheaper there, but now, not by much. Surprisingly, when I called York County (Rock Hill, South Carolina) just over the state line, their property tax rate is higher.

I have read several forums and online articles on property tax, sales tax, and other taxes. Some say you can create an S-corp or LLC in Delaware and register the airplane with it. By my understanding is that this is not legal, unless you have an office in Delaware and intend to base the aircraft there.

Thank you for any advice,
Todd

[Cloudchaser]

Unfortuantely there is not much you can do to offest those taxes, you are correct about the Delaware Corp, although not illegal it just does not protect you from "your" state tax. Planes are going to be taxed wherever they are based, not where they are registered. If you are using your plane for any type of business you should consider setting it up in a Corporation and taking the depreciation deduction which would help you offset your state tax liability by giving you money back on your federal taxes, also your state or county tax would become a deduction as well. You may want to consult with a CPA or Attorney that is knowledgeable about Aviation Tax Laws (most of them are not, it can be difficult to find one.)

[tdfuller]

Cloudchaser: I agree - there is no way legally around the tax bite. However, planes tend to appreciate in value (if maintained) like homes and unlike cars - after an initial depreciation period if it is a new plane.

My plane was originally built in 1978, so that initial depreciation period has long since passed, and it has been in its appreciation phase for a while.

[Mike Simmons]

Piston aircraft are not necessarily appreciating in value. There are many factors involved and it also depends on the type of aircraft but piston values (in general) were declining over the past few months and have stabilized.

Most tax offices use the number right out of the Bluebook to determine the tax value. In some cases, that figure could be high or they may have not updated their figures in some time but the only way to provide another opinion (that is accepted by the tax office), is to have the aircraft professionally appraised.

There is no guarantee on the final opinion of value but at least you will know if you are overpaying on your taxes or not.