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Division of Taxation

Aircraft Purchases and Casual Sales

I am buying an airplane - do I have to pay tax?
The purchase of an airplane may be subject to tax under N.J.S.A. 54:32B-3 of the New Jersey Sales and Use Tax Act. The Sales and Use Tax Act allows a casual sale exemption under N.J.S.A. 54:32B-2(u). The Sales and Use Tax Act defines a casual sale as one which is "... an isolated or occasional sale of an item of tangible personal property... by a person who is not regularly engaged in the business of making retail sales of such property… where the item of tangible personal property… was obtained by the person making the sale, through purchase or otherwise, for his or her own use.” If the previous owner was using the airplane for his own personal use, then the subsequent sale qualifies as a casual sale under the law and Sales Tax is not due.

Examples of prior use of an aircraft by the previous owner that would cause the transaction to be taxable:
  • Held for resale by a dealer;
  • Held for rental,lease or charter;
  • Used for flight instruction.
I am not a resident of New Jersey and want to store my airplane in New Jersey. Do I owe tax?
If you are not a resident of New Jersey, you do not owe Sales and Use Tax. However, you are a New Jersey resident for Sales and Use Tax purposes if you answer “yes” to any of the following questions:
  1. Are you a resident of New Jersey?
  2. Do you maintain a permanent place of abode in New Jersey? (A place of abode is a dwelling place maintained by a person, or by another for them, whether or not owned by such person, on other than a temporary or transient basis. The dwelling may be a house, apartment, or flat; a room including a room at a hotel, motel, boarding house or club, or at a residence hall operated by an educational or charitable or other institution, or a trailer, mobile home, houseboat, or any other premises).
  3. Are you engaged in trade, business or profession in New Jersey?

I want to purchase an airplane and use it for rental/lease. Do I have to pay Sales Tax on the purchase?
No, the purchase qualifies as a sale for resale as long as your business is registered with New Jersey to collect and remit Sales Tax on the rental/lease of the airplane. To document the exemption on the purchase of the aircraft, you should issue the seller a fully completed resale certificate

I am going to purchase an airplane out-of-state. If I bring the airplane back to New Jersey, is this taxable?
The purchase is taxable if the aircraft was purchased from an aircraft dealer, or an owner who used the aircraft for rental and/or leasing activity. An aircraft used by the prior owner for personal use is not taxable..

I am a New Jersey resident who purchased an airplane that I will keep in Delaware. Do I owe tax?
If you are keeping the airplane in a Delaware hanger, then tax is not due to New Jersey since this is not a New Jersey transaction. However, if you bring this airplane into New Jersey, you would owe Use Tax based on the value of the airplane at the time you brought it into this State, unless a valid exemption applies.

If I trade airplanes with someone, is this taxable?
Subsequent transfers qualify as casual sales under the law and tax is not due as long as both owners used the airplanes for their own personal use.

I purchased an airplane through a broker(s). Do I owe Sales Tax?
The casual sales exemption is unavailable and tax is due if the broker runs the funds through his books/account. In other words, if the money is deposited in a broker's account for later disbursement, this will render the broker a dealer because the broker will then be acting as a reseller. If the broker simply connects the buyer and the seller for a fee, the buyer pays the seller directly and the airplane had been purchased for the seller’s own use. This is a casual sales transaction and no tax is due.

I purchased an airplane out-of-state and I had to make payment through an escrow agent. Is this taxable?
No, this is not a taxable transaction. Escrow agents are not considered brokers, because the only involvement they have with the transaction is to hold the funds for the two interested parties (for example, the funds are not run through the escrow agent’s books/account).

If I build a homebuilt aircraft from a kit, is the kit taxable?
Yes, Sales and Use Tax would be due on the purchase of the kit and all accessories.

Can I contact someone in the Division if I have additional questions?
The Casual Sales Unit handles all aircraft transactions. You can contact the unit by email at

Last Updated: Thursday, 04/15/21