Alabama Administrative Code
Title 810 - ALABAMA DEPARTMENT OF REVENUE
Chapter 810-4-1 - AD VALOREM TAX
Section 810-4-1-.09 - Valuation Of Aircraft
Universal Citation: AL Admin Code R 810-4-1-.09
Current through Register Vol. 42, No. 11, August 30, 2024
(1) To ensure the equitable taxation of aircraft in the State of Alabama, the following procedures shall be used for valuing aircraft as of October 1 of each tax year:
(a) Pursuant to §
40-11-6, the
department shall value and assess all taxable airplanes, airships, and other
aircrafts in accordance with §
40-11-1, Code of Ala.
1975.
(b) Owners of
taxable aircraft based in Alabama shall submit an aircraft return form
(ADV-ACR45) to the department either by mail or electronically through the
Optional Personal Property Assessment Link (OPPAL), between October 1 and
December 31 annually. Aircraft are considered based at the location where they
normally depart from and return to, whether the aircraft is in Alabama on the
lien date or not.
(c) The
department shall use the valuation guidelines below each year in the appraisal
of aircraft for the purpose of assessing aircraft for ad valorem
taxation.
(2) GUIDELINES FOR THE ASSESSMENT OF AIRCRAFT SHALL BE:
(a)
All aircraft are assessed as Class II property (20% of market value).
(b) The retail value in the valuation guide
provided to the department by a nationally recognized publisher shall be the
basis for determining the market value of the aircraft. The market value shall
be 89% of the retail value of the aircraft, adjusted for condition, avionics,
etc., to arrive at a fair market value.
(c) If the aircraft is not listed in the
valuation guide, the purchase price, plus any additional cost for rebuilding or
modifications after purchase, Aircraft Blue Book, Trade-A-Plane, other
nationally recognized publications or area comparables may be used as a basis
of market value. The purchase price, plus any additional cost for rebuilding or
modifications after purchase, if used, will be multiplied by the appropriate
ten year economic life composite factor based on year of acquisition and
acquisition cost to calculate market value. The assessed value will be
determined by multiplying the calculated market value by 20%. The assessed
value shall not go below $500 minimum assessed value for aircraft.
(d) Airplanes used exclusively for the
purpose of crop dusting are exempt from ad valorem tax. A taxpayer should claim
the exemption at the time the property is reported.
(e) Aircraft assessments will be sent to the
county in which the aircraft is generally based, departs from, and returns to
in its normal operation for collection. The tax lien attaches to all aircraft
with situs in the state on October 1 for collection one year later. If an
aircraft is not physically in the state on October 1, this does not mean the
aircraft is not taxable for the entire year. If the aircraft is normally kept
in the state, even though it may have been out of the state on October 1, it
would be taxable.
(f) An aircraft
dealer who claims aircraft on the return as inventory should also provide the
department with the following information as it relates to the business:
Section 315 license number, sales tax resale number, number of sales in the
preceding 36 months, counties in the state where inventory is located, and a
detailed listing of the inventory in each county in the state, including year,
make, model, and N number.
(g)
"Kit" or "self-assembled" aircraft shall be valued in accordance with this rule
at the time of inspection and approval as airworthy. Prior to inspection and
approval as airworthy, the market value will be the total cost of all kit parts
multiplied by the appropriate ten year economic life composite factor based on
year of acquisition and acquisition cost and the cost multiplied by the
appropriate ten year economic life composite factor will be used as the basis
of market value each year until the inspection and approval of airworthiness is
achieved. Upon inspection and approval of airworthiness, Aircraft Blue Book,
Trade-A-Plane, other nationally recognized publications, internet web sites, or
area comparables may be used as a basis for market value.
(h) Any aircraft that is reported as not
airworthy is subject to property tax on the lien date of October 1 each year.
The market value as determined in (3)(b) will be reduced by the cost to cure
the aircraft's deficiency. This is the adjusted market value subject to tax.
The cost to cure the deficiency will be determined by the department based on:
1. Documented statement from licensed
aircraft mechanic.
2. Physical
inspection of the aircraft.
(i) Hot Air Balloons shall be valued
according to the procedures in the Alabama Personal Property Appraisal
Manual.
(j) Drones owned by a
business and/or used in a business activity are subject to ad valorem taxation.
The market value of a drone will be the acquisition cost multiplied by the
appropriate five year economic life composite factor based on the acquisition
date.
Authors: Jennifer Byrd, Evelyn Pope
Statutory Authority: Code of Ala. 1975, §§ 40-2A-7(a)(5), 40-7-64, 40-11-6.
Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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