Washington Aircraft Luxury Tax Repeal: Sales, Use, and Excise Tax

Washington’s repeal of the aircraft luxury tax took effect when Governor Bob Ferguson signed HB 2711 on March 31, 2026, wiping out the 10 percent surcharge on noncommercial aircraft before it had a chance to operate in any meaningful way.¹ If you are buying a plane in Washington today, the extra luxury layer is gone. You still owe standard state and local sales or use tax, a modest annual excise fee, and the usual federal obligations, but nothing on top of that tied to the aircraft’s price.

The Ten-Week Window When the Tax Technically Applied

The repeal signing came one day before the luxury tax was scheduled to go live. The tax itself took effect April 1, 2026. HB 2711 carried a general effective date of June 11, 2026. That left roughly ten weeks when the surcharge was technically on the books.¹

If you closed on a noncommercial aircraft above $500,000 between April 1 and June 11, 2026, you may have been charged the 10 percent surcharge on the portion of the price above the threshold. Contact the Department of Revenue to confirm what was collected and whether a refund is available following the repeal.

What the Luxury Tax Would Have Imposed

The repealed statute, Chapter 82.48A RCW, was created in 2025 by ESSB 5801. It applied a 10 percent tax to noncommercial aircraft valued above $500,000, charged only on the portion of the selling price over that cutoff. A $700,000 plane would have triggered the surcharge on $200,000. Leased aircraft used fair market value at the start of the lease. A matching use tax at the same rate applied to aircraft bought outside Washington and kept or flown in the state.²

Aviation groups lobbied against the provision, and parallel luxury taxes on recreational vehicles, cars, and boats were stripped out during the same session. The aircraft version followed.

Sales and Use Tax on Aircraft Purchases

With the surcharge gone, an aircraft purchase in Washington is taxed like any other large sale. The state base rate is 6.5 percent, and local jurisdictions add their own rates. Combined rates land roughly between 7 and 9.6 percent depending on where the aircraft is hangared.³

Buy the plane out of state but hangar or regularly use it in Washington, and you owe use tax instead. The Department of Revenue multiplies the aircraft’s fair market value by the combined state and local rate at the hangar location. Sales tax paid to another state generally earns a credit against the Washington use tax.³

Trading in an existing aircraft reduces the taxable selling price. In a private-party sale, the DOR tests the reported price against fair market value for similar aircraft in similar condition. It will accept the actual price only when it falls within 20 percent of fair market value, or when fair market value is below $7,500.³

Exemptions That Eliminate the Sales or Use Tax

Several categories of aircraft avoid Washington sales and use tax entirely. The broadest exemption covers aircraft used primarily in interstate or foreign commerce for transporting people or cargo for hire. “Primarily” means more than 50 percent of operating time.⁴

Nonresidents who buy a plane in Washington can qualify for exemption if the aircraft is FAA-registered and either used primarily for recreation and under 21 feet in length, used primarily in interstate or foreign commerce, or used as a transport or commuter aircraft.⁴

A separate use-tax exemption under RCW 82.12.215 covers large private airplanes owned by nonresidents. The term has a specific definition: more than 41,000 pounds, not used in interstate commerce, not owned or leased by a government entity, and exempt from state registration under Chapter 47.68 RCW.⁵

Expect the Department of Revenue to ask for documentation on any exemption claim. Flight logs showing interstate routes, business licenses, and proof of nonresident status are common requests. File the paperwork proactively.

The Annual Aircraft Excise Tax

Separate from sales tax, Washington charges an annual excise tax based on aircraft type. The amounts are not tied to value and are modest:

Single-engine fixed wing: $50
Small multi-engine fixed wing: $65
Large multi-engine fixed wing: $80
Turboprop multi-engine fixed wing: $100
Turbojet multi-engine fixed wing: $125
Helicopter: $75
Sailplane: $20
Lighter than air: $20
Home built: $20

These fees are paid through the state’s aircraft registration process and replace all other state and local taxes on the aircraft itself.⁶ Revenue funds the aeronautics account, which supports state airport grants. Nonresident-owned aircraft registered in another state are exempt from the annual excise tax as long as they stay in Washington fewer than 90 days in a calendar year.⁷

Registration After a Purchase

All aircraft based in Washington must be registered with the WSDOT Aviation Division, and WSDOT must be notified of an ownership change within 30 days.⁸ Registration can be completed through the SecureAccess Washington online portal or by paper application mailed to the WSDOT office.⁹ Once the excise fee is paid and the state verifies your information, a decal is issued for display on the aircraft.

Federal Tax Issues Buyers Should Know

Washington is only half the picture. Two federal issues matter most for new aircraft owners, with a third showing up every time you fuel up.

Bonus Depreciation

The One Big Beautiful Bill Act, signed in July 2025, restored 100 percent bonus depreciation for qualifying aircraft and made it permanent. The previous phaseout under the 2017 Tax Cuts and Jobs Act had been reducing the first-year deduction by 20 percentage points each year. For aircraft placed in service in 2026 and used for business, owners can deduct the full purchase price in year one rather than spreading it out. The aircraft must qualify as business property under Section 168(k) of the Internal Revenue Code, and that analysis is fact-specific.

Hobby Loss Rules

If you lease your aircraft or claim business deductions, the IRS can reclassify the activity as a hobby under Section 183. If that happens, your deductions are disallowed while the income remains taxable. The IRS weighs nine factors, including how professionally the operation is run, the history of profits and losses, the time devoted to the activity, and the extent of personal recreation. The determination is made entity by entity. Leasing your plane to your own profitable company does not automatically shield the leasing entity if that entity has never turned a profit. Detailed business-use records, separate books, and documented profit motive are the standard defenses.

Federal Fuel Excise Tax

Aviation gasoline is taxed at $0.194 per gallon. Jet fuel (kerosene) in noncommercial aviation is taxed at $0.219 per gallon, while commercial aviation fuel is taxed at $0.044 per gallon. Fractional ownership programs pay an additional $0.141 per gallon surtax on top of the base rate.¹⁰

1
Washington State Legislature. HB 2711 – Concerning Transportation Resources
2
Washington State Legislature. Washington Code Chapter 82.48A – Noncommercial Aircraft Tax
3
Washington Department of Revenue. Aircraft Excise Tax
4
Washington State Legislature. Washington Code 82.08.215 – Exemptions – Aircraft Used in Interstate or Foreign Commerce
5
Washington State Legislature. Washington Code 82.12.215 – Exemptions – Large Private Airplanes
6
Washington State Legislature. Washington Code 82.48.030 – Amount of Tax
7
Washington State Legislature. Washington Code Chapter 82.48 – Aircraft Excise Tax
8
Washington State Department of Transportation. Aircraft Report of Sale Form
9
Washington State Department of Transportation. Register an Aircraft
10
Internal Revenue Service. IRS Publication 510 – Excise Taxes