Aviation Tax Consultants Newsletter, Spring 2026
Some recent developments can affect aircraft owners and operators around the county.
1. Aircraft inquiry added to tax form by the Internal Revenue Service
Beginning with the 2025 tax year, the IRS added a new question to Form 4562, Depreciation and Amortization. The revised tax form asks the direct question: Do you own, lease, or charter an aircraft?
This is another example of the IRS focusing more resources on taxpayers who operate and depreciate a business aircraft.
2. California property tax assessor over-reach: property tax assessments to visiting aircraft
We are seeing increased activity from California counties—particular Los Angeles, Ventura and San Diego—issuing property tax assessments to aircraft who were merely visiting California airports.
According to the Los Angeles County Assessor’s Office, they have been issuing “escape assessment” to visiting aircraft if they spend as little as 20 overnights in their county airports. While a proration of the assessed may be available based on days in California compared to days in the taxpayer’s home state, this aggressive assessment policy is surprising many aircraft owners from around the country.
If you travel to California often for both business and leisure, you should be aware of this exposure from local property tax assessors.
3. Increased scrutiny on out-of-state LLC registration
There is increased enforcement activity in California and other states to pursue taxpayers utilizing out-of-state legal entities, particularly Montana and Oregon LLC, to register high value assets. Recent enforcement actions have resulted in tax assessments and charges against taxpayers and car dealers involved in these arrangements for luxury cars and recreational vehicles. Here is a recent news article:
California Tax Crackdown on Montana Plates Nets $4M, Charges
While the recent news coverage has focused on vehicles, aircraft has always been a target for state department of revenues across the country. An aircraft is subject to local sales and use tax jurisdiction based on where the aircraft is primarily hangared and used, rather than where the ownership entity is organized, or what address is used for FAA registration.
With the advent of technology allowing aircraft to be tracked, and the availability of ADSB data to essentially any person with access to the internet, we expect sales and use tax and property tax enforcements to increase across the country.
4. Acquisition planning
With the change to the IRS depreciation tax form and the aggressive pursuit of aircraft owners by state and local taxing authorities, it is of utmost importance that aircraft owner develops a proper and tax efficient aircraft ownership structure that takes into account the myriad of federal and state regulatory agencies. Maintaining detailed flight log and supporting documentation continue to be the most effective defense in case of an inquiry.
5. Giving back through charitable flying
Organizations like Angel Flight West (AFW) coordinate flights through an army of volunteer pilots and earth angels (who drive passengers to their final destinations from airports) for patients, veterans, and service animals to medical treatments and training facilities.
Aviation Tax Consultants has been a proud supporter of AFW and other public benefit flying organizations around the country. Thank you to many clients who are active volunteers and supporters for numerous charitable flying organizations across the country.
Angel Flight West will host its annual fundraiser and awards ceremony, the Endeavor Awards, on May 1, 2026, in Los Angeles. To learn more or get involved, please visit: https://endeavorawards.org/
Best regards,
Aviation Tax Consultants
www.aviationtaxconsultants.com
