State Taxes on Aviation


State income taxes generally take a backseat to federal income tax planning. This is because state income taxes are generally computed by reference to federal taxable income and the state tax rates are much lower than the federal tax rates. Nevertheless, the decision where to base the aircraft and the manner in which the aircraft is used can have a significant impact on the owner’s state income tax liability.

5.01 Duty to File State Income Tax Returns

5.02 Change to Apportionment Factors

5.03 The Consolidated Return Trap