August 27, 2010

By Keith G. Swirsky and Troy A. Rolf

Investing in a business aircraft is an expensive undertaking. State and local taxes on business aircraft acquisitions and operations can substantially increase the cost of that investment. For example, taxes in the State of New York can reach 8.75% of the purchase price of a business aircraft.

There are, however, a few exclusions and exemptions in New York law that provide planning opportunities to reduce or eliminate sales and use taxes on business aircraft purchased and/or used in the state. The most commonly used of these are the so-called “Sale-for-Resale Exclusion” and the “Commercial Aircraft Exemption”.

In general terms, a Sale for Resale Exclusion provides an exemption for the sale of an aircraft to a dealer who will hold the aircraft as inventory or to a special purpose leasing entity. In some states the leasing entity concept is used as a primary tax deferral strategy when outright exemption from the tax is not available.

Another provision of the New York sales and use tax law that may exempt a business aircraft from sales and use taxation is the Commercial Aircraft Exemption. The exemption applies to commercial aircraft that are used primarily in intrastate, interstate or foreign commerce.

This article explores the details of both exemptions for aircraft owners and operators in the State of New York.

Review the Complete Article (733 KB, PDF)

About the Authors

Keith G. Swirsky, President of GKG Law and is a tax specialist concentrating in the areas of corporate aircraft transactions and aviation taxation. The firm’s business aircraft group, provides full-service tax and regulatory planning and counseling services to aircraft owners, operators and managers. The group’s services include Section 1031 tax-free exchanges, federal tax and regulatory planning, state sales and use tax planning, and negotiation and preparation of transactional documents commonly used in the business aviation industry, including aircraft purchase agreements, leases, joint-ownership and joint-use agreements, management and charter agreements, and fractional program documents.

Mr. Swirsky may be reached at the firm’s Washington, D.C. office, 1054 31st Street, NW, Suite 200, Washington, D.C. 20007, Telephone: (202) 342-5251, Facsimile: (202) 965-5725, E-mail:

Troy A. Rolf is a business aviation and tax attorney concentrating in the areas of business aircraft transactions and operations in the law firm of GKG Law, P.C., and manages the firm’s Minnesota office. Troy can be contacted at 700 Twelve Oaks Center Drive, Suite 700, Wayzata, MN, 55391, telephone: (952) 449-8817, facsimile (952) 449-0614, e-mail: