Ensuring every single aircraft in a jurisdiction is taxed correctly is a significant task. Across the country, every tax department faces many challenges: differing state laws, owners looking to mitigate their tax responsibility, and the ability of owners to block their tail numbers from public tracking. In fact, this screen is probably a familiar sight to many. It’s what FlightAware shows and (It’s also what leaves tax departments at a dead end. More on this in a minute.)
On top of these challenges lies another complexity. Tracking when an aircraft moves from one jurisdiction and establishes situs in another is nearly impossible. Keeping up with a single aircraft’s flight patterns is one of the most daunting aspects of aircraft taxation. In addition to keeping up, someone needs to notice when those aircraft patterns change. We recently experienced this occurrence with one of our clients.
The original client is a metropolitan county of a major US city. Performing our audit from 2016–2023, we found an omitted aircraft based in the county from 2016–2019. Situs in this state is determined “where flights normally originate,”so our records provided clearcut tax liability and the failure to file. This $4 million dollar aircraft was liable for 4 years, and the client recovered approximately $298,000. Remember that FlightAware screen? This particular aircraft had hidden its tail number from our client. They couldn’t hide from us because our proprietary process uncovers all aircraft.
Let’s not forget about 2020-2023. Because our experts review each aircraft individually, we spotted it. The aircraft had relocated in 2020.
In 2021, our flight records showed it had ceased flying in this southern county and relocated to establish situs in a second, northern county. The second county wasn’t a Specialized Tax Recovery client, but we sent them the information anyway. (That’s how much we believe in equitable taxation. Plus, we’re nice guys.) They determined it met their tax code and recovered — and continue to collect — the taxes owed. An additional $156,000 was collected.
Blending Technology + Human Analysis
We often talk about our proprietary process here at STR. Technology is only one side of the process. We never recommend taxing an aircraft unless we’ve analyzed it ourselves. It’s not solely a computer-generated recommendation. Our aviation experts start with factual data to analyze the aircraft in question, and then build an ownership timeline to view the aircraft holistically. Nothing is missed or left out.
It’s this combination of computer data and expert human analysis that makes our findings accurate and reliable. It’s also what makes it impossible for state and local tax departments to locate all aircraft within their jurisdiction without some help. There are just too many aircraft. We get it. We’re here to help.
Recover Aircraft Taxes, Empower Communities
Specialized Tax Recovery (STR) ensures communities and schools are fairly funded by helping officials discover and collect the taxes owed to them on aircraft transactions and ownership. Integrity guides everything we do. We use superior insights and advanced technology to help ensure fair and equitable taxation.