Because Texas doesn’t tax personal use aircraft, owners often hide business use. It’s only by looking at the details that we can ensure fair taxation and compliance.
Restoring Trust & Recovering Revenue
The Quick Trip
LOCATION: Southern US; Nearly 200,000 residents; Tourist Destination
MEDIAN HOME VALUE: $328,500
TAX AUDITOR: Elected
STR CLIENT SINCE: 2022
TAX REVENUE RECOVERED: $208,000
STR SERVICES: Discovery
STR Helped This County Recover $208,000+ from One Aircraft
While the elected tax official was out of the office on sick leave, a new person had to learn how to manage aircraft taxation — fast. Even with Specialized Tax Recovery as a current, vetted partner, their approach was understandably cautious. We had to prove ourselves again. And we did.
The Law.
In this southern state, aircraft owned on January 1 of each year are subject to ad valorem property taxation by the county in which they establish situs or show habitual use. The tax rate varies by county, and each local tax office is responsible for monitoring and taxing their aircraft. The county tax offices are tasked with ensuring compliance across various aircraft ownership types including: non-residents, personal or business travel, commercial operations, air transportation, or flight instruction.
The Challenges.
Numerous aircraft operating in this state choose to register their aircraft in another location in hopes of remaining undetected and untaxed. So far, it’s worked.
This office hired STR because they were struggling with these aircraft. On top of aircraft owners looking to avoid their county tax liability, the tax official had to take a medical leave of absence, thrusting a replacement into a difficult position. Aircraft in the past had been an issue, and the office needed better data.
Issuing a tax bill, especially a large one that’s overdue, can be a daunting task. Plus, the tax office wants to avoid the headaches of a lengthy appeal process. STR was brought in to assure the new leadership they could completely trust our process to achieve uniform and accurate taxation.
STR Solutions.
As an extension of their tax assessment capabilities, everyone at STR viewed the relationship as a partnership. We understand the complexities of aircraft taxation. In this case, we took our time helping our new colleague get to know our systems and processes. The tax office learned to see our data was accurate and efficient, and it helped them make informed decisions.
Through our proprietary discovery process, we found an aircraft they needed to tax. It was registered out of state in Delaware in an attempt to avoid taxation, yet situs was clearly in their jurisdiction. We also knew it had skirted its tax responsibility for 4 years.
The Result.
Because we gained the trust of our new colleagues, they issued the tax bill. No questions, no headaches. Not only did the county recover the approximately $208,000 owed to them, but they’ll also receive their annual taxes on this aircraft moving forward.
This is money rightfully owed to the community, to the schools. We got it back, and there’s more coming. This is just one example of many that helped this county recover omitted accounts.
Get to Know the Aircraft Guys
We did it for them, and we can do it for you. Let’s talk about how we can enrich your compliance rate and complement your assessment and collection strategy for all aircraft.
How 2 Counties Recovered Taxes from 1 Aircraft
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.