By Robert A. McKenzie and Edward A. Snyder, attorneys at law, Arnstein & Lehr LLP
On Oct. 1, the State of Illinois began a tax amnesty program allowing all taxpayers, including aircraft owners, to pay their unpaid taxes without penalty or interest.
Generally, to qualify for the amnesty program an aircraft owner must owe tax (not just penalties and interest) for any period ending after June 30, 2002, and before July 1, 2009, and must submit full payment of that tax no later than Nov. 8, 2010.
Most aircraft owners may participate in the amnesty program by filing an original or amended return and making full payment of the tax due on or before Nov. 8, 2010. Aircraft owners who are undergoing audit, are disputing a proposed tax in an administrative hearing, or who have already had tax, penalties, and interest assessed may also participate, but must following the procedures on the Illinois Department of Revenue website
Aircraft owners who do not participate in the amnesty program will be subject to harsh consequences, including a doubling of the applicable penalties and interest.
Illinois imposes sales or use taxes on most aircraft owners ranging from 6.25% – 9.25% of the purchase price of their aircraft. If an aircraft is purchased from an in-state dealer, the owner is charged a sales tax of up to 9.25%, depending on his or her location. If the aircraft is purchased from a non-dealer or an out-of-state dealer, the owner is required to file a Use Tax Transaction Return and pay use taxes of 6.25% – 7.25%, in lieu of the sales tax. Non-Illinois owners can also be subject to the Illinois Aircraft Use Tax if they move their aircraft to Illinois permanently or for non-temporary storage.