We use information from your report to calculate your tax due using these steps:
1. Determine Total System-Wide Estimated Market Value
This is the total net book value of all your airline property, including spare parts.
2. Calculate Total Minnesota Apportioned Estimated Market Value
To get the total Minnesota apportioned estimated market value, we multiply the Minnesota apportionment percentage to the total system-wide estimated market value.
The Minnesota apportionment percentage is the average of the following two values:
- Your company’s revenue ton miles flown in Minnesota divided by revenue ton miles flown throughout your company’s system
- Your number of departures made in Minnesota divided by the total number of departures throughout your company’s system
3. Calculate Total Minnesota Tax Capacity
Total Minnesota tax capacity is determined by multiplying a tax capacity rate to the total Minnesota apportioned estimated market value.
The tax capacity rate is 40% of the value for quiet aircrafts, which includes turboprops and aircrafts defined as Stage 3 or 4 of aircraft noise levels by the Federal Aviation Administration. For all other flight property, the tax capacity rate is 70% of the value.
This tax capacity will be reduced by an additional 50% if your company meets the following two qualifications:
- A majority of the aircrafts operated by your company are turboprops
- Your company provides passenger service for at least six months during the year to at least three airports anywhere that serve communities in Minnesota with a population less than 100,000 not located in Anoka, Carver, Dakota, Hennepin, Ramsey, Scott, or Washington counties
4. Calculate Airline Flight Property Tax
The Airline Flight Property Tax due is the tax rate times total Minnesota tax capacity.
The tax rate is calculated by dividing the levy by the total tax capacities of all airline companies.
The Minnesota Department of Transportation certifies the Airline Flight Property Tax levy by December 31. We will calculate the Airline Flight Property Tax, and you will receive a tax order by March 1 of the following year.
Calculation Examples
| |
Example 1 |
Example 2 |
Example 3 |
|---|
| Levy |
$7,000,000 |
$8,000,000 |
$8,000,000 |
| Total Tax Capacities of all Airline Companies |
$400,000,000 |
$400,000,000 |
$500,000,000 |
| Tax Rate |
1.75% |
2.00% |
1.60% |
| ABC Air Tax Capacity |
$50,000 |
$50,000 |
$55,000 |
| Tax Liability |
$875 |
$1,000 |
$880 |
Paying the tax
Pay the Airline Flight Property Tax by April 1 of the following year. Your tax order will include payment method information.
