TAX AUTHORITIES TURN UP THE HEAT ON AIRCRAFT TRANSACTIONS
October 15, 2024
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After the Internal Revenue Service increased audits of business aircraft earlier this year, state tax authorities followed suit. For instance, the Florida Department of Revenue (“DOR”) intensified its tax investigations in recent months, particularly focusing on sales and use tax compliance for aircraft transactions. Following the approach of federal authorities, the number of aircraft audits conducted by Florida’s DOR exceeded industry expectations. To discourage sales tax avoidance and improve compliance among high-income taxpayers, auditors at both the state and federal level are focusing more than ever on aircraft owners, flight schools, and leasing entities. The FAA’s Aircraft Registry makes it easier than ever before for auditors to determine aircraft registration and ownership arrangements. Whether deducting business expenses related to aircraft maintenance or contemplating an aircraft transaction, it is important for owners and operators to consider tax mitigation strategies like performing an internal audit to determine potential exposure as regulatory scrutiny reaches new heights. Should you have any questions regarding aircraft transactions, state sales/use tax, and state tax audits, including in the state of Florida, we would be happy to assist.
This Aviation Blog is intended to keep readers current on developments in the law. It is not intended to be legal advice. If you have any questions, please contact Evelyn Sahr at 202.659.6622 or esahr@eckertseamans.com; Drew Derco at 202-659-6665 or dderco@eckertseamans.com; Jay Julien at 202.659.6648 or jjulien@eckertseamans.com, or Samantha Walter at 412.566.1920 or swalter@eckertseamans.com, or any other attorney at Eckert Seamans with whom you have been working.
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