# Indiana aircraft tax

> Indiana charges 7 percent sales or use tax on aircraft, with a nonresident exemption if the aircraft leaves within 30 days. The aircraft rental inside a flight lesson is taxed while separately stated instruction is not, and aircraft register every year with the Department of Revenue and pay an aircraft excise tax by weight, age and type.

Source: https://www.aerscheduler.com/aircraft-tax/united-states/indiana
Checked: 2026-10-18

## Do you pay sales tax on an aircraft bought in Indiana?

**Taxed.** 7% sales or use tax on the purchase price less any trade-in. An aircraft bought from a private seller is reported and the tax paid when the owner registers it with the Department of Revenue, within 31 days of purchase.

> "The current sales/use tax rate is 7%."
>
> Indiana Department of Revenue, [Form AE-7, Application for Aircraft Registration, instructions, line 35](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

> "Any resident of Indiana who owns an aircraft must submit this form within 31 days of purchase date or within 31days of the Federal Aviation Administration (F A A) issuing the airworthiness certificate in the case of homebuilt aircraft."
>
> Indiana Department of Revenue, [Form AE-7, Application for Aircraft Registration, instructions](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

## Do you owe use tax on an aircraft bought outside Indiana?

**Depends.** Use tax at 7% applies to an aircraft brought into Indiana, with a credit for sales tax paid to another state up to the Indiana amount. A nonresident who bases an aircraft in Indiana for more than 60 days must register it. Aircraft brought in only for repair, completion work or a prepurchase evaluation, and flown out within 30 days after the work, are exempt.

> "The current sales/use tax rate is 7%."
>
> Indiana Department of Revenue, [Form AE-7, Application for Aircraft Registration, instructions, line 35](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

> "If you paid sales tax to another state, you are entitled to a credit not to exceed the amount on Line 36."
>
> Indiana Department of Revenue, [Form AE-7, Application for Aircraft Registration, instructions, line 37](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

> "Any nonresident who bases an aircraft in Indiana for more than 60 days must submit this form within 60 days of establishing a base in Indiana."
>
> Indiana Department of Revenue, [Form AE-7, Application for Aircraft Registration, instructions](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

> "Within 30 days after completion of the repair, refurbishment, remanufacture, or prepurchase evaluation, the aircraft is transported to a destination outside Indiana."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

## What aircraft sales tax exemptions does Indiana have?

**Depends.** A nonresident's purchase is exempt if the aircraft leaves Indiana within 30 days after delivery or after work done in Indiana, is titled or registered elsewhere, and is not titled or registered in Indiana. Indiana presumes evasion when an Indiana resident buys through a business formed in a state without sales tax, such as Montana or Delaware, and from July 1, 2026 adds a $500 penalty. A purchase for rental is exempt only if yearly rental revenue reaches 7.5% of the price, and aircraft leased for public transportation are exempt.

> "The purchaser transports the aircraft to a destination outside Indiana within 30 days after:"
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

> "The aircraft will not be titled or registered in Indiana."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

> "purchased by a limited liability company, partnership, corporation, or other closely held business organized in another state that does not have a sales tax or equivalent tax (i.e., Montana, Alaska, Delaware, Oregon, and New Hampshire);"
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

> "Beginning July 1, 2026, the purchaser will also be subject to a $500 penalty for each transaction made after June 30, 2026."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

> "An exemption will be granted on the purchase of the aircraft if the annual revenue derived from renting or leasing the aircraft is equal to or greater than 7.5% of the net acquisition price for the aircraft or the book value of the aircraft as published in the Vref Aircraft Value Reference (VAVR) guide for the aircraft."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

> "A person who acquires an aircraft to rent or lease to another person for predominate use in public transportation by the other person is exempt from sales or use tax."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

## Are aircraft rentals taxed in Indiana?

**Taxed.** Aircraft rentals and leases are taxed, and every use of a rental aircraft, including by related parties, must be charged a rental fee plus sales tax. An owner who bought the aircraft tax-free for rental must keep yearly rental revenue at 7.5% of the price until the tax collected on rentals equals the tax exempted, or 13 years pass, or owe use tax on the original price.

> "All use of the aircraft must be charged a lease or rental fee plus sales tax, including related parties."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

> "A person is required to meet the 7.5% revenue requirement until the earlier of the date the aircraft has generated Indiana sales tax on leases or rental income that equals the amount of the original sales tax exemption, or the elapse of 13 years."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

> "If a person engaged in the business of leasing an aircraft does not meet the minimum annual revenue amount for the lease of the aircraft, the person will be subject to use tax in the amount of sales tax that would have been originally due based on the original cost or VAVR book value of the aircraft."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

## Is flight instruction taxed in Indiana?

**Depends.** When a lesson combines aircraft rental with instruction, the aircraft rental charge is taxable. The instructor's charge is exempt if it is stated separately from the aircraft rental.

> "If the instructor leases or rents an aircraft to the student and provides flight instruction to the student during the term of the lease or rental, the gross retail income that is subject to the sales tax is the amount charged by the instructor for the lease or rental of the aircraft used in conjunction with the flight instruction services provided to the student pilot."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

> "Any charges related to the instructor's service of instructing the student are exempt from the sales tax if the lease or rental of the aircraft and the charge for the instructor's services are separately stated."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #76, Determination of Sales Tax for Leased Aircraft and for Flight Instruction](https://www.in.gov/dor/files/sib76.pdf), dated April 2023. Checked 2026-10-18.

## Are aircraft parts and maintenance labor taxed in Indiana?

**Depends.** Parts, materials, equipment and engines used in repairing or maintaining an aircraft or its avionics are exempt when the work is done by an FAA repair station, or by an FAA-certified mechanic working from a leased maintenance facility at a public-use airport that meets the airport's minimum standards.

> "There is also a sales tax exemption for parts, materials, equipment, and engines used, consumed, or installed in the repair, maintenance, refurbishing, remodeling, or remanufacturing of an aircraft or an avionics system of an aircraft."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

> "If the work is performed by a retail merchant who possesses a valid repair station certificate issued by the Federal Aviation Administration; or"
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

> "has leased a facility at a public use airport for the maintenance of aircraft, b. meets the public use airport owner's minimum standards for an aircraft facility, and c. the work is performed by a mechanic who is certified by the Federal Aviation Administration."
>
> Indiana Department of Revenue, [Sales Tax Information Bulletin #74, Sales and Use Tax Exemption for Aircraft Being Repaired or Remanufactured](https://www.in.gov/dor/files/sib74.pdf), dated May 2026. Checked 2026-10-18.

## Does Indiana register or tax aircraft every year?

**Taxed.** Aircraft based in Indiana register with the Department of Revenue every year for a $10 fee and pay an aircraft excise tax per pound of maximum landing weight, set by class and age. A piston aircraft up to 4 years old pays four cents a pound, falling with age to one cent a pound at 26 years and older.

> "The registration fee is $10 unless the aircraft is owned by a nonprofit museum or by the State of Indiana, in which case there is no registration fee."
>
> Indiana Department of Revenue, [Form AE-7, Application for Aircraft Registration, instructions, line 44](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

> "0-4 Years $.04 $.065 $.09 $.0175"
>
> Indiana Department of Revenue, [Form AE-7, line 23 rate table, ages | Class A | Class B | Class C | Class D](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

> "26 Years and Older $.01 $.01 $.01 $.005"
>
> Indiana Department of Revenue, [Form AE-7, line 23 rate table, ages | Class A | Class B | Class C | Class D](https://forms.in.gov/Download.aspx?id=14086), dated R11 / 7-26. Checked 2026-10-18.

_Not tax advice. Confirm with the state's revenue department or a CPA before a purchase or a pricing decision._