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Last Updated: 4/27/2017

Reporting Tax and Record-keeping

Reporting tax

Taxes on aircraft are reported differently than most items on your sales and use tax return. Starting July 1, 2015, you must report taxes on the sale or purchase of an aircraft (including leases and rentals) on a new tax line of your sales and use tax return.

This is not a new tax. But a recent law change requires the Minnesota Department of Revenue to deposit sales and use taxes collected on aircraft registration into the State Airports Fund. (See Minnesota Statutes 297A.82, subd. 4a)

You will no longer use the General Rate Sales Tax or Use Tax Purchases tax lines to report sales or use tax on aircraft.

  • Report Minnesota sales tax you collect on the sale or lease of aircraft on the Aircraft Sales line
  • Report Minnesota use tax you owe on the purchase or lease of aircraft on the Aircraft Use line
  • Report local sales or use taxes on aircraft on the appropriate Local Tax lines

Note: You may need to add Aircraft Sales (line 712) and Aircraft Use (line 713) to your return. For instructions, see Adding Local Tax and Other Taxes to a Sales and Use Tax Account.

Note: If you are an annual filer, report any sales or use tax on aircraft for the calendar year (January 1 – December 31) on the new aircraft tax lines.

Error message

When reporting aircraft sales or purchases, you may get an error message when you submit your sales and use tax return in our e-Services system. This can happen when you have nothing reported on the General Rate Sales Tax line.

If you get an error message, provide details in the Explanation field, such as “I reported taxable sales or purchases on the Aircraft tax lines.” View a Sample explanation.

Filing Returns

When filing your return, you must report all sales tax collected and use tax you owe.

If you are not registered for sales and use tax, you must contact the Minnesota Department of Revenue and register to collect and report taxes. Call Business Registration at 651-282-5225 or 1-800-657-3605 (toll-free).

Record-keeping

It is important to keep good records to determine the correct amount of state and local tax you owe.

Your records should include:

  • Bills, receipts, invoices, and any other documents that support the entries in your books
  • Exemption certificates
  • Shipping documents
  • Worksheets used to prepare your tax returns
  • Aircraft log books
  • Lease agreements
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