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Illinois Tax Requirements for Aircraft

What is my tax obligation when I apply for registration in Illinois?

At the time you apply for an Illinois registration with the Illinois Department of Transportation for an aircraft you purchased, leased, or acquired, you are required to submit either payment of tax or proof that no tax is due before your aircraft can be registered.

The Illinois Department of Revenue is responsible for administering the collection of tax and providing the necessary tax forms. You must make separate payments for tax due and registration fees. Make your tax payment payable to the Illinois Department of Revenue and your payment for registration fees payable to the Illinois Department of Transportation.

Which forms are used for paying Illinois tax?

One of the following forms must be used to pay tax or claim that no tax is due:

Note: For more detailed information, refer to the instructions provided with each return.

How can I avoid filing my tax return late?

The tax return you are required to file has a specific due date. You must file your tax return and pay any tax due by that date to avoid penalty and interest charges even though you may not be able to complete your application for registration.

To accomplish this, submit your tax return and any tax payment directly to the Illinois Department of Revenue. When you pay the tax, please make sure you receive your copy of the tax return with an indication (such as a receipt stamp or a label) that your tax return has been filed. When you are ready to complete your registration forms, you will need to submit your copy of the tax return to the Illinois Department of Transportation as proof that you have filed your tax return.

What if I purchase or lease an aircraft from an out-of-state dealer, lending institution, leasing company selling at retail, or other retailer?

When an Illinois resident purchases or leases an aircraft from an out-of-state dealer and will register the aircraft in Illinois, the sale and subsequent tax due is reported on Form RUT-25 when you bring the aircraft into Illinois. You should attach a copy of the bill of sale as proof of the purchase price.

If you are leasing the aircraft from an out-of-state retailer, you must use Form RUT-25-LSE to report the transaction. Attach a copy of the bill of sale or lease contract, as appropriate, as proof of the selling price and of any tax previously paid. If you cannot obtain the proper documentation, you may submit a letter from the leasing company or selling dealer.

What if I purchase (or acquire by gift or transfer) an aircraft from a party that is not in the business of selling aircraft at retail?

You must use Form RUT-75 to report your acquisition of an aircraft from an individual or other party that is not in the business of selling aircraft at retail.

Note: An "other party," as used above, includes companies that obtain their aircraft from a related or unrelated party who is not in the business of selling at retail. This includes mergers or other types of business organizations.

If you purchased the aircraft, attach a copy of the FAA bill of sale and purchase agreement/invoice as proof of the purchase price.

If you acquired the aircraft by gift, donation, or transfer, the fair market value of the aircraft should be used to determine the tax due. If our review of a return results in a question about the fair market value stated, we have the authority to determine the aircraft's fair market value.

What if I am moving into Illinois with an aircraft I own or lease that needs to be registered?

If you originally purchased your aircraft from a dealer, lending institution, leasing company, or other retailer, you must use Form RUT-25 when you bring the aircraft into Illinois. Attach a copy of the bill of sale or other proof of the purchase price. If you had the aircraft registered in another state for more than three months, you must use Form RUT-25 to reflect the fact that no tax is due.

On Form RUT-25, the exemption for using the aircraft outside Illinois for more than three months applies only to individuals moving into Illinois. It does not apply to businesses moving into Illinois or to military persons whose home of record is in Illinois. In these situations, tax is due; however, a credit for tax properly paid to another state and a reasonable allowance for depreciation for prior out-of-state use are allowed.

If you are leasing the aircraft from an unregistered out-of-state retailer, you must use Form RUT-25-LSE when you bring the aircraft into Illinois. Attach a copy of the bill of sale or lease contract, as appropriate, as proof of the selling price and of any tax previously paid. If you cannot obtain the proper documentation, you may submit a letter from the leasing company or selling dealer.

If you originally purchased (or acquired by gift or transfer) your aircraft from an individual or other party who is not in the business of selling aircraft at retail, you must use Form RUT-75 to report your acquisition.

Note: An "other party," as used above, includes companies that obtain their aircraft from a related or unrelated party who is not in the business of selling aircraft at retail. This includes mergers or other types of business reorganizations.

Attach a copy of the FAA bill of sale and purchase agreement/invoice as proof of the purchase price.

What if I am already a resident of Illinois and leasing an aircraft from an out-of-state leasing company?

As the owner of the aircraft, the lessor generally is liable for Illinois Use Tax and responsible for filing and paying this tax using Form RUT-25-LSE when the aircraft is brought into Illinois. However, you, the lessee, may be required to assume this responsibility. If you must do so, you should attach a letter from the leasing company or a copy of the lease agreement to Form RUT-25-LSE as proof of the purchase price and tax previously paid to another state.

What if I purchase an aircraft that I have been leasing from an out-of-state leasing company?

If the out-of-state leasing company is registered with the Illinois Department of Revenue to collect Illinois tax, then Form ST-556 is used to report the purchase. The out-of-state leasing company will complete and file this tax return for you. In some cases, the out-of-state leasing company may also file the required registration forms.

If the out-of-state leasing company is not registered, you will be required to report your purchase. To do so, you must use Form RUT-25. Since Form RUT-25 is due no later than 30 days after the “date (the aircraft is) brought into Illinois” and you already have possession of the aircraft in Illinois, use the actual purchase date for both the “purchase date” and the “date brought into Illinois” on the return. Attach a copy of the bill of sale as proof of the purchase price.

What if I purchase an aircraft from an Illinois dealer?

The dealer will complete and file the proper tax return for you. In some cases, the dealer may also file the required registration forms. The dealer will use Form ST-556 to report your purchase.

What if I purchase an aircraft from an Illinois leasing company, lending agency, or other retailer?

If the Illinois leasing company, lending agency, or other retailer is registered with the Illinois Department of Revenue to collect Illinois tax, then Form ST-556 is used to report the purchase. Generally, the leasing company, lending agency, or retailer will complete and file this tax return along with the required title forms for you. If this is a transaction for lease, the registered retailer will complete Form ST-556-LSE instead.

If the Illinois leasing company, lending agency, or retailer is not registered, you will be required to report your purchase. To do so, you must use Form RUT-25. Since Form RUT-25 is due no later than 30 days after the date the aircraft is brought into Illinois and you already have possession of the aircraft in Illinois, use the actual purchase date for both the "purchase date" and the "date brought into Illinois" on the return. You should attach a copy of the bill of sale as proof of the purchase price. If this is a transaction for lease, you will complete Form RUT-25-LSE instead. Attach a copy of the bill of sale or lease contract, as appropriate, as proof of the selling price and of any tax previously paid. If you cannot obtain the proper documentation, you may submit a letter from the leasing company or selling dealer.

What if I purchase an aircraft using a broker/agent?

If the broker/agent does not take title to the aircraft and you purchase the aircraft from an individual or private party who is not a retailer of aircraft, the purchase is subject to Aircraft Use Tax and you must file Form RUT-75.

If the broker/agent does not take title to the aircraft and you purchase the aircraft from a retailer of aircraft, the purchase is subject to tax and requires the appropriate tax form (ST-556 or RUT-25) to be filed by the required due date.

If the broker/agent takes title to the aircraft and you purchase the aircraft from the broker/agent, a retail sale has occurred. The purchase is subject to tax and requires the appropriate tax form (ST-556 or RUT-25) to be filed by the required due date.

How do I get forms?

You can obtain tax forms by

How do I get tax help?

You can get tax help by