Taxable Sales

Aircraft dealers must charge the Minnesota general sales tax rate and any applicable local sales taxes at the time of sale, unless the sale qualifies for an exemption. If the sale is exempt, the purchaser must give you a completed Form ST3, Certificate of Exemption. 

You must inform the Minnesota Department of Transportation, Office of Aeronautics, about the sale and if it was taxable or exempt from sales tax so the aircraft registration can be completed. For more information, see Registration Information.

Buyers may not be charged Minnesota sales tax if they purchase an aircraft from a private party, a business that normally does not sell aircraft, or an out-of-state dealer. But these sales are taxable unless a specific exemption applies.

If you were not charged sales tax, use tax is due when when you register the aircraft with the Office of Aeronautics. For more information, see Registration Information.

Aircraft trades are fully taxable unless they are handled by a licensed aircraft dealer or lessor.

Trades Between Individuals

No trade-in deduction is allowed for direct trades between individuals, with no involvement by an aircraft dealer or lessor. Each buyer must register their aircraft and pay Minnesota use tax on its full value.

Trades With a Dealer or Lessor

When a licensed aircraft dealer or lessor handles the trade, a trade-in deduction is allowed only if both of these conditions are met:

• The invoice or sales document records the trade and the value of each aircraft
• Both aircraft have a federal registration number shown on the invoice or sales document
  Even with the trade-in deduction, the buyer may owe sales or use tax. Whether – and how much – tax is due will depend on the value of the two aircraft, as shown in the table below.

Note: The new owners must complete their own Aircraft Registration, unless a licensed Minnesota aircraft dealer handled the transaction.

The following purchases are subject to sales or use tax.

• Aviation oil
• Repair and replacement parts, and installation labor for aircraft not operating under Federal Aviation Regulations, parts 91 or 135.

If the purchaser picks up the aircraft at the seller’s location, charge the sales tax rate that applies at the seller’s location.

If the seller delivers the aircraft to a different location for the purchaser, charge the sales tax rate that applies to the location where the aircraft was delivered.