The retail sale of an aircraft, including all accessories attached when delivered to the purchaser, is subject to the 4.75% general State rate of sales and use tax with a maximum tax of $2,500 per article. The retail sale of a qualified jet engine as defined in N.C. Gen. Stat. § 105-164.3, including all accessories attached when delivered to the purchaser, is subject to the 4.75% general State rate of sales and use tax. Aircraft and qualified jet engines are not subject to the local and transit rates of sales and use tax. Gross receipts derived from the retail sale of aircraft or qualified jet engines and the sales and use tax thereon are to be reported to the Department on Form E-500, Sales and Use Tax Return, or through the Department’s online filing and payment system.
In the instance where sales tax has not been paid on the taxable purchase of a qualified jet engine, a use tax at the 4.75% general State rate of tax applies when purchased or received from within or without this State for storage, use, or consumption in this State. A person purchasing a qualified jet engine may apply to the Secretary for a direct pay permit in order to purchase without payment of tax and such person shall pay a maximum tax of $2,500 directly to the Secretary. Form E-595JE, Application for Direct Pay Permit for Qualified Jet Engine, should be used to apply for the direct pay permit.
In the instance where sales tax has not been paid on the taxable purchase of an aircraft, a use tax at the 4.75% general State rate of sales and use tax with a maximum tax of two thousand five hundred dollars ($2,500) per article applies to an aircraft purchased or received from within or without this State for storage, use, or consumption in this State.
For a business or person who is not registered with the Department and is required to remit use tax on an aircraft purchased or received from within or without this State for storage, use, or consumption in this State on which sales tax has not been paid, the business or person must file Form E-555, Boat and Aircraft Use Tax Return. Retailers of aircraft must use Form E-500 or the online filing and payment system to remit use tax on an aircraft purchased or received from within or without this state for storage, use or consumption in this state on which sales tax has not been paid.
Additional Information for Aircraft and Qualified Jet Engines
- Sales and Use Tax Technical Bulletin Section 35-9 (Aircraft) (2009-2018 legislative changes not included)
Technical Publications for Aircraft and Qualified Jet Engines
- Important Notice: Direct Pay Permit and Use Tax Exemption for Certain Boat, Aircraft, and Qualified Jet Engine Charges and Services (7-15-16)
- Important Notice: Service Contract for a Qualified Jet Engine (1-14-16)
- Important Notice: Exemption for Qualified Aircraft (10-13-15)
- Important Notice: Qualified Jet Engine (10-6-15)
- Important Notice: Sales Tax Rate Increase for Aircraft (9-30-15)
- Important Notice: Proposed Sales Tax Rate Increase for Aircraft (9-25-15)