Aircraft and Maine Use Tax

Incomplete and inaccurate information has recently been circulated on the subject of Maine’s use tax as it applies to aircraft purchased outside of Maine by nonresidents. Stories that have appeared on the internet have left the impression that Maine law imposes, and that Maine Revenue Services assesses, a use tax on any out-of-state aircraft that is flown into Maine. That is not the case. In most situations, nonresidents flying into Maine do not owe the tax and are not at risk of being assessed. There are circumstances where a tax will be due, but that is the exception, not the rule.

Click here for a two-page summary of how the law actually works in this area.
One key thing to remember is that Maine use tax is not even a possibility unless an aircraft comes into Maine within the first 12 months after its purchase by a nonresident. Also, even if the aircraft is present in Maine within the first 12 months for purposes other than repair and maintenance, no Maine use tax is due if a sales or use tax of 5% or more was paid in another state. Finally, even if an aircraft is present in Maine within the first 12 months after its purchase by a nonresident, no use tax is due if the aircraft is here for no more than 20 days during the 12 months following its purchase, exclusive of days during which the aircraft is in this State for the purpose of undergoing "major alterations," "major repairs" or "preventive maintenance" as those terms are described in FAA regulations.

The bottom line is that nonresidents need to plan carefully only if they intend to fly into Maine, and spend more than 20 days in Maine, within one year after the initial purchase of their aircraft and have not paid a sales or use tax on their aircraft in another state.

For more information, contact David Bauer of Maine Revenue Services at david.e.bauer@maine.gov.

BUREAU INFORMATION

Aircraft and Maine Use Tax