Aircraft Dealers and Brokers

What aircraft dealers and brokers need to know about sales and purchases.

Definitions

Aircraft Dealer and Aircraft Broker

An aircraft dealer is a person or business that sells, offers for sale, or imports aircraft into Florida for sale at retail; or otherwise has aircraft in its possession or control for use in this state. An aircraft broker also offers aircraft for sale but may not have the aircraft in its possession. For sales tax purposes, an aircraft dealer and broker are the same.

Who Must Register to Collect Tax?

Aircraft dealers and brokers must register with DOR to collect and remit sales tax prior to beginning business in this state. Most aircraft sellers must also register to collect and remit solid waste fees on sales of new tires and sales of new lead-acid batteries. You can register online; go to the Department's Internet site at www.myflorida.com/dor and click on e-Services. If you do not have Internet access, you can complete a paper Application to Collect and/or Report Tax in Florida (Form DR-1).

Most local governments also impose registration or licensing requirements; contact them before starting business.

What is Taxable?

Sales Tax

All aircraft sold and/or delivered in this state are subject to Florida's 6 percent sales tax, unless specifically exempt. Florida aircraft dealers and brokers are required to collect sales tax from the purchaser at the time of sale or delivery. All sales of aircraft between individuals are taxable if the sale and/or delivery occurs in Florida.

If an aircraft is delivered into a county that imposes a discretionary sales surtax, then the dealer must also collect this tax. Discretionary sales surtax applies only to the first $5,000 of the purchase price.

Use Tax

Use tax complements and is applied in the same manner as sales tax. The use tax rate and sales tax rate are the same, including discretionary sales surtax, if applicable. Use tax is due on goods and services that are brought into the state untaxed or taxed at a rate less than Florida's.

The "use" tax component of Florida's sales and use tax provides uniform taxation of items purchased outside Florida but which are used or stored in this state. A credit may be allowed for taxes paid in another state, a U. S. territory or the District of Columbia. Credit is not allowed for taxes paid to another country.

Example: If an aircraft is purchased in a state that has a sales tax rate of 4 percent, the owner may be required to pay an additional 2 percent when the aircraft is brought into Florida.

Under most conditions, use tax is due on aircraft brought into Florida within 6 months from the date of purchase. However, use tax may be immediately due if any of the following conditions are met:

• The aircraft is owned by a Florida resident.
• The aircraft is owned by a corporation and used by a corporate officer or director who is a Florida resident.
• The aircraft is owned by a corporate entity that has an individual vested with authority to participate in the management, direction, or control of the entity's affairs who is a resident of or makes his or her permanent residence in this state.
• The aircraft is owned by a person, corporation, limited liability company, partnership, joint adventure, association, syndicate, business trust, trust, estate, or other form of artificial entity that is not engaged in Florida in any employment, trade, business, or profession in which the aircraft will be used.

Registered Dealer's or Broker's Use Tax Liability

Aircraft dealers who are registered with DOR, and who purchase aircraft exclusively for resale and do not pay sales tax at the time of purchase, must pay a "use tax" if the aircraft is used in the dealer's business. The dealer must pay the use tax in any month in which the aircraft is used by the dealer to generate income. Examples of taxable uses are: charter, rental, basic flight training, and demonstrations where a charge is made. The use tax is computed on 1 percent of the value of the aircraft for each month that the dealer uses the aircraft.

What is Exempt?

An aircraft dealer or broker who is a registered sales and use tax dealer may purchase aircraft tax-exempt if the aircraft are purchased exclusively for resale, lease, or rental. The purchaser must present a signed copy of his or her Annual Resale Certificate (Form DR-13) to the seller. A nonresident dealer may also purchase an aircraft for resale tax-exempt if the dealer provides a notarized statement to the seller that the aircraft will be immediately removed from Florida and resold. If the nonresident dealer uses the aircraft for any purpose other than to resell it, the aircraft may become taxable.

Sales to Nonresidents

Aircraft sales to nonresidents are exempt from sales tax under either of the following conditions:

• The aircraft must be removed from this state within 10 days of purchase.
• If the aircraft needs repairs, additions, or alterations, it must immediately be placed in a repair facility registered with the Department of Revenue (DOR) and removed from Florida within 20 days from the date the work is complete.

The following requirements must also be met:

• At the time of sale, the dealer must obtain a signed affidavit from the purchaser attesting that the purchaser has read the applicable law and rules regarding the exemption claimed and will timely remove the aircraft as required.
• Within 5 days from the date of sale, the dealer must provide DOR with a copy of the invoice, bill of sale, and/or closing statement; and the original, signed, removal affidavit.

This exemption does not apply to sales to Florida residents, corporations that have officers or directors who are Florida residents, or other entities whose controlling individual is a Florida resident.

Trade-Ins

Dealers or brokers registered with DOR may allow a credit for a trade-in. The taxable amount is the gross selling price minus the credit allowed for the trade-in. To qualify for a trade-in credit, the following must apply:

• Only tangible personal property (not realty) can be accepted as trade-in credit for other tangible personal property.
• The sale and trade-in must be a single transaction and the trade-in must be taken into the selling dealer's inventory for resale.

Alternative Method for Calculating Estimated Tax

Aircraft dealers and brokers may use an alternative method to calculate estimated sales tax. To qualify for the alternative method, a dealer must have made at least one sale of an aircraft with a selling price of $200,000 or more in the prior state fiscal year (July 1st - June 30th). Dealers and brokers must apply before October 1st of each year and be approved by DOR to use this method. To apply, complete and mail Form DR-300400, Boat, Motor Vehicle or Aircraft Dealers Application for Special Estimation of Taxes.

Penalty and Interest

A dealer or broker who fails to collect and/or remit the tax due or fails to obtain and maintain the proper records to prove an exemption becomes liable for tax, penalty, and interest on each transaction. Records are subject to inspection and verification by DOR.

Reference Material

Tax Laws

Call Taxpayer Services to request a copy of Rule 12A-1.007, Florida Administrative Code, Aircraft, Boats, Mobile Homes, and Motor Vehicles; Rule 12A-1.071, F.A.C., Rentals, Leases, or License to Use Tangible Personal Property; and Rule 12A-15, F.A.C., Discretionary Sales Surtax. Tax laws are also available on the Department's Internet site. Look for the Florida Tax Law Library.

Brochures

The following brochures are available from your local DOR service center, the DOR Distribution Center, or Taxpayer Services:

• Florida's Sales and Use Tax
• Discretionary Sales Surtax
• Aircraft - Owners and Purchasers
• Tangible Personal Property Rentals

For Information and Forms

Aircraft Enforcement Unit
Florida Department Of Revenue
PO Box 6417
Tallahassee Fl 32314-6417
Telephone: 850-487-3273
Fax: 850-487-0969

Information and forms are available on our Internet site at www.myflorida.com/dor.

Persons with hearing or speech impairments may call the TDD line at 800-367-8331 or 850-922-1115.

• Order multiple copies of forms from our Internet site at www.myflorida.com/dor/forms or
• Fax form requests to the DOR Distribution Center at 850-922-2208 or
• Mail form requests to:
  

  Distribution Center
  Florida Department of Revenue
  168A Blountstown Hwy
  Tallahassee FL 32304-2702