Indiana Lowers Aviation Fuel Taxes

AINalerts » May 2, 2013
May 2, 2013, 2:57 PM

Aircraft operations in Indiana are about to become more affordable after state legislators approved a slate of aviation tax exemptions and restructurings. The measures, adopted at the urging of the Aircraft Owners & Pilots Association (AOPA) and other aviation groups, remove state sales tax on jet fuel and 100LL avgas and restructure the previously existing excise tax on aviation fuel to a fixed total state tax rate.

Under the new legislation, the net drop for 100LL is 50 cents per gallon and about 30 cents per gallon for jet-A, according to an AOPA spokesman. Both fuels will now have a fixed 10-cent-per-gallon excise tax at the state level. The new tax structure would mean savings per fill-up of more than $100 for a Beech Baron and $220 for a King Air 200.

Also included in the new legislation is a repeal of sales tax on aircraft maintenance and aircraft parts. “Indiana had to respond, as other states have seized on their neighbors’ tax structures to gain competitive advantages for their aviation businesses,” said Bryan Budds, AOPA Great Lakes regional manager. “Indiana repair shops have been unable to compete by attracting out-of-state aircraft for services, and have seen the troubling trend of based aircraft leaving the state to save money.”

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TJ
on May 15, 2013 - 6:41pm

These articles are all well and good but when are these changes taking effect?
Tj

No Avatar
CEvanston
on June 25, 2013 - 10:08am

Indiana Aviation Fuel Excise Tax FAQs

What is considered “aviation fuel”?

Per IC 6-2.5-5-49, aviation fuel is defined as gasoline used to power an aircraft, jet fuel, or a synthetic fuel used as a substitute for gasoline or jet fuel.

Is aviation gasoline or jet fuel subject to the 7% Indiana state gross retail (sales) tax?

No, effective July 1, 2013, all aviation fuel including aviation gasoline and jet fuels are exempt from the 7% Indiana gross retail (sales) tax.

What is the aviation fuel excise tax rate?

The department has interpreted the aviation fuel excise rate to be 10 cents per gallon per IC 6-6-13.

Who must pay the aviation excise fuel tax?

An end user must pay the 10-cent-per-gallon aviation fuel excise tax via the retailer when the fuel is placed into the fuel supply tank of an aircraft unless the end user has issued a valid exemption certificate to his retailer (Form AVF-105).
A “retailer” is a person who engages in the business of selling or distributing aviation fuel to the end user within Indiana.

Can I purchase aviation fuel and not pay the 10 cents per gallon?

Yes, only the following entities are exempt from the aviation fuel excise tax:
The U.S. government or federal agency or instrumentality from the United States
The state of Indiana, The Indiana Air National Guard, Common carriers of passengers and freight

Do I need to file the Aviation Fuel Excise Tax Exemption Certificate (Form AVF-105) with the Department of Revenue?

No, the retailer must keep the exemption certificate provided by the end user on file in their office for the periods in which they claim exempt sales.

Do I need to be registered to sell aviation gasoline or jet fuel to the end user?

Yes, a Form AVF-1, Aviation Fuel Excise Tax Application, must be on file for each retailer who places aviation gasoline or jet fuel into the fuel supply tank of an aircraft.

Who must file the return?

Effective July 1, 2013, a retailer that sells aviation fuel to an end user for use in an aircraft must charge and collect the 10-cents-per-gallon aviation fuel excise tax.

How do I report the tax?

You must submit Form AVF-150 to report the aviation fuel excise tax.
You must report and remit the tax using the department’s online tax filing program (INtax).

Is there a credit for timely filing and paying the aviation fuel excise tax?

Yes, IC 6-6-13 allows a retailer who properly remits aviation fuel excise taxes by the due date a credit of 1.6% of the taxes due to cover the costs of collecting, reporting, and timely remitting aviation fuel excise taxes. If the return or tax is filed late, the credit is not allowed and 100% of the tax collected must be remitted upon filing.

When is the return due?

The return and payment are due on the 15th of the month following the reporting period (e.g. the return for the month of July would be due on August 15).

Is there a penalty for filing or remitting the aviation fuel excise tax late?

Yes, the penalty for not timely remitting or filing the aviation excise tax is an amount equal to 100% of the tax due to be remitted plus interest.

Can I make a payment by credit card?

No, all payments must be made by electronic funds transfer (EFT) using an ACH credit or an ACH debit. You can register to make your EFT payment via ACH debit in INtax, but if you want to be registered to use the ACH credit method of EFT payment, you must complete the EFT-1 form. It can be located at www.in.gov/dor/3516.htm. If you have questions about EFT payments, please contact the department at (317) 232-5500.

Who can I contact if I have questions about the aviation fuel excise tax?

Questions should be directed to the Indiana Department of Revenue Special Tax Division, Fuel Tax Section by phone at (317) 615-2630 or email at fetax@dor.in.gov.

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