Arizona Aircraft Tax: Rates, Use Tax, and Penalties

Arizona replaces property tax on aircraft with an annual license tax collected by the Arizona Department of Transportation. For most privately owned planes, the Arizona aircraft tax is one-half of one percent of the aircraft’s average fair market value, with a floor of $20 per year.¹ You have 60 days from the date you buy a plane or bring one into the state to register it with ADOT and pay the tax.²

The license tax is set by the state constitution as a substitute for all ad valorem property taxes on registered aircraft, so you are not separately assessed property tax on the plane itself.³

Who Owes the Tax

Any person or government entity that purchases an aircraft in Arizona or brings one into the state must register it within 60 days, and registration triggers the license tax.² Three categories are exempt from the registration requirement entirely:

Airline aircraft operated on regular schedules primarily carrying passengers or cargo for hire in interstate, intrastate, or international service.
Aircraft owned by a nonresident and based in Arizona for no more than 90 consecutive days, or 90 total days in a calendar year, provided the plane is not engaged in intrastate commercial activity.
Balloons, which are exempt from both registration and tax.

Government-owned aircraft used in public service by the United States, Arizona, a political subdivision, or the Civil Air Patrol must still register, but owe no license tax.³

The 90-day threshold is the number nonresidents need to watch. Day 91 pulls your plane into Arizona’s registration and tax system unless another exemption applies.

The Standard 0.5% Rate

For a typical privately owned plane, the annual tax is 0.5% of the aircraft’s average fair market value for its make, model, and year.¹ ADOT pulls that value from recognized industry valuation guides. Condition, avionics upgrades, and modifications do not change the assessed value; it is a straight average for the make, model, and year.

The tax can never fall below $20 for a full year of registration, no matter how low the calculated amount.¹ Because most aircraft depreciate, the bill tends to shrink as the plane ages.

Flat-Rate Categories

Several types of aircraft pay a flat $20 per year instead of the percentage rate. Arizona groups them under a single “special aircraft” statute.⁴ The qualifying categories:

Antique aircraft, 50 years old or older by date of original manufacture and federal certification.
Classic aircraft, at least 40 years old but not more than 49.
Experimental aircraft, designated as such on the FAA airworthiness certificate.
Homebuilt aircraft, built by the owner or a non-commercial builder.
Warbird, glider, and balloon aircraft.

The $20 for each of these categories cannot be prorated for a partial year.⁴

Aircraft in storage or undergoing repairs also pay $20 per year under a separate statute.⁵ Salvage aircraft, meaning planes being restored that are not meant to be flown, pay just $5 per year.⁶ A nonresident whose aircraft is in Arizona solely for work at a federally certified repair facility also pays $20, provided the owner files a sworn affidavit each year.

Reduced Rate for Nonresidents Staying 91 to 210 Days

A nonresident who bases an aircraft in Arizona for more than 90 days but fewer than 210 days in a calendar year pays a reduced rate of one-tenth of one percent (0.1%) of average fair market value, as long as the plane is not engaged in intrastate commercial activity.⁷ That is one-fifth of the standard rate. Cross 210 days and you move to the full 0.5%. If you winter in Scottsdale or Tucson with your plane, counting days accurately is worth the effort.

Use Tax When You Buy Out of State

The license tax is not the only tax that can apply to your plane. If you buy an aircraft from an out-of-state vendor and the sale was not subject to Arizona’s transaction privilege tax, you likely owe Arizona use tax when the plane is stored or used here. Once you register with ADOT, the department shares your information with the Arizona Department of Revenue, which checks whether use tax was collected at the time of sale. If ADOR needs more information it will send a questionnaire, followed by a bill if tax is owed.⁸ You can generally claim a credit for sales tax already paid to another state on the same purchase.

Casual sales between private parties who are not in the business of selling aircraft are exempt from transaction privilege tax. Purchases from an Arizona dealer are subject to transaction privilege tax at a combined state, county, and city rate that depends on where the sale takes place.

How to Register and Renew

The initial filing is the Application for Aircraft Registration (Form 05-0501), available in the ADOT MVD forms library. You will need the FAA-assigned N-number, manufacturer, model, year, and serial number, along with your bill of sale or closing statement to document purchase price and acquisition date. If you are claiming an exemption, file the Aircraft Exemption Affidavit (Form 05-0502) as well.⁹ Payment must accompany the application. Once ADOT processes it, the state issues a registration certificate and a license decal to display on the aircraft.

Renewals can be filed online through AZ MVD Now, which ADOT identifies as the fastest option. Your due date is visible in your account.¹⁰

Late Penalties, Interest, and Liens

Miss the deadline and the penalty is $25 for the first month of delinquency plus $5 for each additional month, added to your registration fee.¹¹ Six months overdue runs $50 in penalties ($25 plus five additional months at $5). The director can waive some or all of the penalty if you show reasonable cause, specifically a reasonable belief that the aircraft was exempt.

Unpaid tax also accrues interest at the federal short-term rate plus three percentage points, compounded annually, on top of the flat monthly penalties.¹²

If penalties and interest do not produce payment, ADOT sends a written assessment notice for the full balance. That assessment becomes final 30 days after it is mailed or delivered unless you file a written objection and request a hearing within the 30-day window.¹³ There is no second chance after it lapses.

Unpaid license taxes, fees, and penalties automatically create a lien on the aircraft from the due date, and that lien takes priority over nearly every other claim except certain state tax liens that have priority by law.¹⁴ The lien stays until every dollar of tax, fees, penalties, and lien recording costs is paid, which means you cannot cleanly sell or transfer the plane. On ADOT’s request, the county sheriff or any peace officer can physically seize the aircraft, and if the amounts owed remain unpaid 60 days after seizure, the sheriff sells it at public auction. This outcome is rare, but the statutory authority is real and the timeline is short.

Contesting a Valuation

If you think ADOT’s fair market value overstates what your plane is worth, the assessment notice is the starting point. You have 30 days from the date it is mailed or delivered to submit a written objection and request a hearing.¹³ Miss the window and you lose the right to challenge.

Because ADOT uses the average value for your make, model, and year, poor condition, damage history, or missing equipment are not reflected in the assessment. A professional appraisal supporting a lower figure can strengthen your case at a hearing. Certified aircraft appraisals typically start around $600 and run higher for more complex aircraft, so weigh that cost against the tax at stake before you file.

1
Arizona Legislature. Arizona Revised Statutes 28-8335 – License Tax; Tax Rate
2
Arizona Legislature. Arizona Revised Statutes 28-8322 – Registration; Exceptions; Definition
3
Justia. Arizona Constitution Article 9 Section 15 – License Tax on Aircraft
4
Arizona Legislature. Arizona Code 28-8339 – Special Aircraft; License Tax Rate; Definitions
5
Arizona Legislature. Arizona Revised Statutes 28-8337 – Stored or Repaired Aircraft; License Tax Rate
6
Arizona Legislature. Arizona Revised Statutes 28-8338 – Salvage Aircraft; License Tax Rate; Definition
7
Arizona Legislature. Arizona State Senate Fact Sheet for SB 1406
8
Arizona Department of Revenue. Aircraft Use Tax
9
Arizona Department of Transportation. MVD Forms Library
10
Arizona Department of Transportation. Aircraft Registration
11
Arizona Legislature. Arizona Revised Statutes 28-8329 – Late Registration; Penalty; Abatement
12
Arizona Department of Revenue. Interest Rates
13
Arizona Legislature. Arizona Revised Statutes 28-8328 – Failure to Register; Assessment Procedure
14
Arizona Legislature. Arizona Revised Statutes 28-8330 – Lien