Hello! My name is Janell, and I am excited to be the new Licensing Specialist at the North Dakota Aeronautics Commission (NDAC). It has been a wonderful experience getting to know the local pilots who stop by and handling the many calls I receive each day.
A portion of my job is to license aircraft, aerial applicators, and aircraft dealers. I have the pleasure of working with aircraft owners of all levels, from the first ever recent purchase to those with numerous aircraft who have been flying for decades. For those who have not researched North Dakota aircraft excise tax and registration just for fun, this article is for you. The NDAC understands how exciting it is to purchase or acquire an aircraft. We are here to help with the process of making sure your aircraft is compliant with North Dakota Century Code (NDCC) 57-40.5, which states that the State of North Dakota imposes an excise tax on all aircraft purchases. So, what does that mean?
There is a 5% excise tax on the purchase price of any aircraft purchased or acquired, either in or outside the state of North Dakota, if the aircraft is required to be registered under the laws of this state. Aircraft used exclusively for aerial application purposes have an excise tax imposed at a rate of 3%. If an aircraft is parked, hangared, or has landed in North Dakota for 30 or more unique days within a calendar year, it is required to be registered and an excise tax is due, unless it has been previously paid in another state.
Our office receives notices from the Federal Aviation Administration (FAA) that include information such as flight activity, aircraft considered to be based at a North Dakota airport, and changes made to the ownership of any aircraft in our state. This alone can trigger a notice from our office alerting you of a tax owed. If you are registering your aircraft with the FAA when you transfer the legal ownership of your aircraft, then the excise tax is due within 30 days. Aircraft owners should be proactive with registering their new purchases with us.
Is it possible to avoid paying this tax!?
It’s no surprise that there are a few aircraft owners in every state that would want to attempt to avoid paying sales tax, since aircraft are typically high-ticket items. Purchasers often buy their aircraft from an out-of-state seller, in which sales tax is not collected, and some do not realize that the corresponding excise tax is triggered when the aircraft is subsequently brought into North Dakota. Those using a Montana address are not automatically free from paying the tax, if their aircraft are parked, hangared, and/or landed in North Dakota for more than 30 unique days in a calendar year. However, exemptions do exist! Credit for excise tax paid in other states will be honored; we just need proof. If the state you paid tax in collected less than 5%, you may need to pay that difference, but we are not looking to collect more than 5%. Each state’s regulations and registration requirements differ. Make sure you research the regulations of the state you want to frequent your aircraft, as it may need to be registered in multiple states. Other excise tax exemptions, like aircraft for use as an air ambulance, can be found by reading section 57-40.5-03 of the NDCC.
The tax is also a one-time fee and we have reciprocity with other states. Keep your tax payment record, as it could save you from paying excise tax to another state if the aircraft is ever relocated. Also, if you utilize an aircraft dealer and perform a trade-in on a new aircraft, then you would also be eligible to receive credit on the tax that has already been paid. Credit is only granted on trade-ins and is not eligible if two separate private aircraft transactions occur.
We understand that no one enjoys paying taxes; however, it is important to understand where your money is going. The taxes and annual registration fees collected by our agency go directly into a special fund, which enables the state to provide airport infrastructure grant funding to ensure the safe operation of North Dakota’s public-use airports. The fees support the maintenance and preservation of the very airports that you are able to enjoy and utilize, once you purchase your aircraft.
Be sure to visit the licensing section of aero.nd.gov for information about making sure your aircraft is properly registered with the State of North Dakota. Please also feel free to reach out to me at any time with questions that you may have. You can reach me at firstname.lastname@example.org or by calling (701) 328-9650.
Janell Pederson, Licensing Specialist
North Dakota Aeronautics Commission