Illinois aircraft sales tax is 6.25% of the purchase price, but the statute that applies, the form you file, and who files it depend on how you acquired the aircraft. Buying from an Illinois dealer, buying from a private party, and bringing in a plane purchased out of state each trigger a different reporting path. The state also requires proof of tax payment before it will register your aircraft, and missing the 30-day filing window can push penalties as high as 20% of the tax owed.
Which Form You File and Who Files It
The seller determines the form. That single fact drives most of the paperwork.
- Buying from an Illinois dealer. The transaction is taxed under the Retailers’ Occupation Tax at 6.25%. The dealer collects the tax and files Form ST-556 on your behalf. Local sales taxes can push the effective rate above 6.25%.1Illinois General Assembly. Illinois Code 35 ILCS 120/2-10
- Buying from a private party, or receiving the aircraft as a gift. The Aircraft Use Tax Law applies at 6.25%, and you file Form RUT-75 yourself. This is the most common form for individual buyers.2Illinois General Assembly. Illinois Code 35 ILCS 157/10-153Illinois Department of Revenue. Illinois Tax Requirements for Aircraft4Illinois Department of Revenue. Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return
- Buying from an out-of-state dealer, lender, or leasing company and bringing the aircraft into Illinois. You file Form RUT-25 under the Use Tax Act at 6.25%.5Illinois Department of Revenue. Use Tax and Local Use Tax
Form RUT-75 can be filed electronically through MyTax Illinois or on paper when you register the aircraft with the Illinois Department of Transportation.4Illinois Department of Revenue. Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return
What Form RUT-75 Asks For
The return requires your Social Security number or federal employer identification number, your name, address, and phone number, plus the same contact information for the seller. For the aircraft, you supply the year, make, model, serial number, N-number, and total airframe hours. Enter the date you acquired the aircraft and, if the purchase happened outside Illinois, the date you brought it into the state.
The critical line is purchase price. You must enter the higher of the actual selling price or the fair market value.6Illinois Department of Revenue. RUT-75 Instructions for Aircraft/Watercraft Use Tax Transaction Return Attach the purchase agreement or invoice and the FAA bill of sale (Form AC 8050-2). Payment goes in with the return, either by direct debit or by check.
How the Tax Is Calculated
For a purchase, the tax is 6.25% of the selling price. Illinois will not accept an artificially low sale price: the statute says the selling price cannot be less than the fair market value of the aircraft on the purchase date or the date you bring it into Illinois, whichever is later.2Illinois General Assembly. Illinois Code 35 ILCS 157/10-15 If you paid $180,000 for a plane worth $210,000, expect the state to tax the $210,000 figure.
For a gift or a transfer with no purchase price, the tax base is the fair market value at the time you acquire the aircraft or bring it into Illinois.2Illinois General Assembly. Illinois Code 35 ILCS 157/10-15 The Department of Revenue has authority to challenge your stated value after the fact, so a defensible appraisal is worth having on file. Professional aircraft appraisals typically run $600 to $1,000 or more depending on the aircraft type.
Credit for Tax Paid to Another State
If you already paid sales or use tax to another state on the same aircraft, Illinois allows a credit against your Illinois liability. The state also permits a reasonable depreciation allowance for prior out-of-state use when an aircraft comes into Illinois well after the original purchase.3Illinois Department of Revenue. Illinois Tax Requirements for Aircraft Keep the original purchase documents and proof of the tax you paid elsewhere in order to claim the credit.
Trade-In Credit
Trading in an aircraft as part of the transaction reduces the taxable base. Tax then applies only to the net difference between the new aircraft’s price and the trade-in value. This works when you trade through a registered dealer, because the dealer must intend to resell the aircraft you traded.
Exemptions That Can Eliminate the Tax
Several statutory exemptions can reduce or wipe out the Illinois tax entirely. Each carries strict documentation requirements, and a missing certification voids the exemption.
Fly-Away Exemption
The exemption most non-resident buyers rely on. If you buy an aircraft in Illinois but do not plan to base or register it here, no tax is imposed when all three conditions are met: the aircraft leaves Illinois within 15 days after the final billing or the post-sale inspection required by 14 C.F.R. 91.407 is complete, whichever is later; the aircraft is not based or registered in Illinois afterward; and you file a signed certification on the prescribed form with the Department of Revenue confirming these facts.7Illinois General Assembly. Illinois Code 35 ILCS 105/3-55 The certification must state your name, address, where the aircraft will be titled, and its primary physical location going forward. The exemption sits in subsection (h-2)(1) of 35 ILCS 105/3-55.
Prepurchase Evaluation Exemption
An aircraft temporarily in Illinois for a prepurchase evaluation is exempt from use tax, provided it is not based or registered here afterward and the buyer files the required certification with the Department.7Illinois General Assembly. Illinois Code 35 ILCS 105/3-55 This covers the common situation of flying a plane into an Illinois shop for inspection before deciding whether to buy.
Rolling Stock Exemption
Aircraft used by interstate carriers for hire qualify for the rolling stock exemption under 35 ILCS 105/3-55(c). “For hire” is the operative language. A corporate flight department flying executives across state lines does not qualify, even if every flight crosses a border. The aircraft must transport people or property for hire as part of a commercial operation like a charter airline or cargo carrier. The administrative code explicitly excludes aircraft used to transport a company’s own officers, employees, or customers.8Legal Information Institute. Illinois Administrative Code Title 86, Section 130.340 – Rolling Stock
The 30-Day Filing Window and Penalty Tiers
Form RUT-75 is due within 30 days after you acquire the aircraft in Illinois, or within 30 days after you bring it into the state if you bought it elsewhere, whichever is later.6Illinois Department of Revenue. RUT-75 Instructions for Aircraft/Watercraft Use Tax Transaction Return Thirty days is tight for a transaction this size, and the penalties climb quickly.
Under the Uniform Penalty and Interest Act, late payment penalties tier as follows:
- Paid within 30 days of the due date: 2% of the unpaid amount.
- Paid more than 30 days late but before an audit: 10%.
- Paid after the Department initiates an audit: 20%, reduced to 15% if you pay the full amount within 30 days after the Department provides an amended return.9Illinois General Assembly. Illinois Code 35 ILCS 735 – Uniform Penalty and Interest Act
Interest accrues from the day after the due date at the federal underpayment rate under IRC Section 6621.9Illinois General Assembly. Illinois Code 35 ILCS 735 – Uniform Penalty and Interest Act On a $500,000 aircraft, the 6.25% tax is $31,250. Slipping from the first tier to the second turns a $625 penalty into $3,125.
Registration and Why You Cannot Skip the Tax
Illinois residents who fly their aircraft in the state must register with the Illinois Department of Transportation, and IDOT will not complete that registration without proof of tax payment or proof that an exemption applies.10Illinois Department of Revenue. Aircraft Use Tax The registration process is the enforcement mechanism: without it you cannot legally operate the aircraft in Illinois.
Federal registration is separate. The FAA charges a $5 registration fee, and you submit the executed FAA bill of sale (Form AC 8050-2) with the application.11Federal Aviation Administration. Aircraft Registration FAA and IDOT registrations are independent, but both are required to legally own and operate an aircraft based in the state.
Federal Tax Benefits for Business Aircraft
If the aircraft is used for business, two federal provisions can offset the acquisition cost.
100% Bonus Depreciation
The One Big Beautiful Bill Act, signed in 2025, permanently restored 100% bonus depreciation under IRC Section 168(k) for qualifying property, including both new and pre-owned aircraft placed in service on or after January 20, 2025. There is no scheduled phaseout. A taxpayer who meets the business-use requirements can deduct the full acquisition cost in the year the aircraft enters service.12Husch Blackwell. One Big Beautiful Bill Act Restores Full Bonus Depreciation for Qualifying Aircraft Under the original Tax Cuts and Jobs Act schedule, the deduction would have dropped to 20% in 2026.
The aircraft must be used more than 50% for qualified business purposes to claim bonus depreciation. Personal flights, commuting, and entertainment use generally do not count toward that threshold. Mixed business and personal use requires careful logbook documentation.
Hobby Loss Rules
The IRS scrutinizes aircraft deductions under Section 183, which disallows deductions for activities not conducted with a genuine profit motive. If the IRS classifies your aircraft activity as a hobby rather than a business, you lose the depreciation deduction and cannot use aircraft-related losses to offset other income. Courts look at whether the aircraft genuinely furthers a business purpose, whether records are properly kept, and whether expenses are paid by the business entity rather than personally. Owning a plane and occasionally using it for business travel is not enough if the economic relationship between the aircraft and the business cannot withstand scrutiny.
Records to Keep
Hold onto the bill of sale, purchase agreement, filed tax return, proof of payment, and any exemption certifications for as long as you own the aircraft and for at least the period the IRS requires to substantiate related deductions.13Internal Revenue Service. Recordkeeping In practice, that means keeping these records for three to seven years after you dispose of the aircraft, depending on whether they support depreciation or basis calculations. The Illinois Department of Revenue can also revisit your reported fair market value later, so a contemporaneous appraisal and complete purchase records are your best defense against an assessment for additional tax.