The application of Tennessee sales and use tax depends on the physical location of the aircraft. However, taxpayers claiming ownership of an aircraft that is domiciled outside Tennessee must maintain adequate documentation and proof to support that the aircraft has remained in a state other than Tennessee.
An aircraft that is hangered in Tennessee, even if also hangered in another state, may be subject to tax in Tennessee as a taxable import. There is no bright line test in Tennessee for how long an aircraft must be in Tennessee to be taxable in Tennessee.
Tennessee residents are required to file the Affidavit Transfer of Aircraft and provide proper proof. The Affidavit or Transfer of Aircraft can be found here. Please complete the applicable schedules. The seller signature is not required unless the Affidavit is being filed by the seller on a sales transaction. To support that the aircraft is in another state, please provide as a minimum the following or state the reason you cannot provide the information:
- Purchase agreement or invoice
- Proof of payment such as bank records or credit card statement to support the purchase price
- Copies of flight logs during ownership
- Copy of hangar agreement or invoices during ownership
- Copy of insurance policy to show the location of the aircraft
- Proof of sales tax paid to another state
Additional information may be requested based on your response.
The aircraft owner must provide clear and cogent evidence to prove the aircraft is in another state and not in Tennessee; otherwise, the purchase/transfer/potential import may be taxable in Tennessee.
Reference: Tenn. Code Ann. § 67-1-113.