Aircraft Excise Tax
The State of North Dakota imposes an excise tax on all aircraft purchases. Excise tax must be paid at a 5% rate on the purchase price for all non‐agricultural aircraft and a 3% rate on the purchase price on all agricultural aircraft. The excise taxes should be paid along with the aircraft registration. Aircraft owners must complete the Application for Registration of Aircraft/Ultralight and Remittance of Excise Tax form. For more information about North Dakota’s excise tax regulations view North Dakota Century code 57‐40.5.
Key Points On Excise Tax Due On Aircraft
All excise tax due on an aircraft is to be paid to:
North Dakota Aeronautics Commission
PO Box 5020
Bismarck, North Dakota 58502‐5020
When the sale of an aircraft is handled between two private individuals, the buyer is responsible for the excise tax. When the sale takes place between an aircraft dealer and an individual, the dealer notifies the N.D. Aeronautics Commission of the sale and commission collects the tax from the individual at the time of registration.
There is a 30 day grace period for registration from time of transaction.
Excise tax is levied on every purchase transaction, with trade‐in allowance of another aircraft or licensed motor vehicle allowed. Non‐residents who bring to the state aircraft for commercial use which have not been previously registered in North Dakota may be subject to the excise tax on the value of the aircraft. North Dakota has reciprocity with all States on sales or excise taxes except Alaska, Delaware, Montana, New Hampshire, Oregon, Texas and West Virginia.
A purchaser of airplanes who is licensed as a Dealer of airplanes, who uses such property solely for demonstration or display and for which no charge is made while holding it for sale in the regular course of business, is not subject to the excise tax.
Exemptions for sales tax are as follows:
1. Aircraft acquired by disabled veterans as defined by the provisions of Public Law No. 79‐663 [38 V.S.C. 1901]
2. Aircraft owned by federal or state government or agencies or institutions thereof.
3. Transfer by gift, inheritance or between husband and wife present and child or brothers and sisters; transfer of aircraft to reflect a new name by a business. Reorganization if ownership remains in the same person or person as prior to reorganization.
4. Aircraft transferred between a lessee and lessor for one year or more and tax paid in full or credit for use tax paid.
5. Aircraft acquired by any parochial or private nonprofit school.
Penalties: Failure to pay the excise tax is a criminal offense and is punishable by up to thirty days’ imprisonment, a fine of $1,000, or both. Additionally, the Aeronautics Commission can impose significant civil monetary penalties, enlist the help of law enforcement officers to enforce aeronautics laws, and subpoena delinquent aircraft owners to appear before the Commission during a public meeting to explain the failure to pay the required fees.
Please contact the North Dakota Aeronautics Commission for additional questions regarding the excise tax.