South Dakota pilots seek relief from double taxation

January 31, 2012

South Dakota pilots are rallying with AOPA to protect homebuilders from double taxation.

In lieu of the state’s 4 percent sales and use tax, South Dakota currently collects a registration tax, 4 percent of aircraft total value, from owners of homebuilt and factory aircraft alike. Owners pay in subsequent years a fee based on aircraft weight and age. Recently, the South Dakota Department of Revenue has presented homebuilders with an additional bill: back taxes due on the installed components and parts, including engines, avionics, and propellers, that would be exempt from further taxation when installed in a factory.

AOPA and the South Dakota Pilots Association are urging lawmakers to support South Dakota House Bill 1209, which would clearly protect homebuilders from double taxation.

"Conventionally built aircraft don't receive sales- or use-tax bills for their engines or propellers, so why is the Department of Revenue pursuing homebuilders?" AOPA Regional Manager Bryan Budds said. "We need the state to see homebuilt aircraft are no different than their conventionally built counterparts."

AOPA, noting the $300 million generated for the state’s economy by South Dakota’s 2,300 general aviation pilots, urged members of the House Taxation Committee to support a “fair, equitable and transparent aircraft tax structure” and support the pending legislation. The committee received the bill Jan. 24; AOPA will follow its progress closely. South Dakota pilots and owners will be advised when a hearing date is set; Action Alerts will be emailed as developments warrant. Updates and critical information also will be published on AOPA Online.

Topics Taxes, Advocacy