If you happen to own commercial or private aircraft purchased in the Rocky Mountain High state, you may be interested to know that Colorado recently updated its guidelines for sales and use tax on aircraft and aircraft parts.
According to Colorado Department of Revenue, aircraft “used in interstate commerce by a commercial airline and parts permanently affixed to aircraft are exempt from sales and use tax.” Interested parties are advised to contact home-rule cities for their specific regulations.
Commercial Aircraft
Commercial Aircraft used or purchased for use in interstate commerce by a commercial airline are exempt from sales and use tax. Commercial airline is defined as “an airline carrying freight or passengers on regularly scheduled flights for a fee.”
Private Aircraft
Nonresidents of Colorado who purchase new or used aircraft in Colorado are also exempt from sales tax provided the following three conditions are met:
1. The aircraft is sold to a nonresident of Colorado;
2. The aircraft will be moved from the state within 120 days of the date of sale;
3. 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.
Aircraft Parts
Aircraft parts are exempt from sales and use tax if they are permanently affixed to the aircraft. Examples include, but are not limited to, paint for the aircraft, seats, fuselage parts, and parts for the aircraft’s engine.
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