The Oklahoma Bar Journal October 2024

reasons to own an aircraft that will be used in Oklahoma through an entity formed in another state, doing so does not, on its own, exempt the aircraft from the Oklahoma excise tax. Aircraft owners are sometimes tempted or advised to form a spe cial purpose entity in a state with no aircraft sales tax, such as Montana. 9 Montana has become a popular state of registration for luxury auto mobiles and recreational vehicles for owners seeking to avoid sales tax, 10 and some Montana registered agent services specifically advertise registering an aircraft in Montana to “avoid potentially paying thou sands in sales tax.” 11 But because the Oklahoma excise tax is assessed on the aircraft used in the state and not based on where the entity holding title to the aircraft was formed, using a special purpose entity in a tax-favorable jurisdiction does not create an exemption. Oklahoma currently provides 17 legitimate exemptions to the aircraft excise tax. 12 Some of the more frequently used exemptions include inherited aircraft, 13 air craft transferred between family members 14 and aircraft owned by a lender following a repossession. 15 Several of the exemptions apply to

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

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THE OKLAHOMA BAR JOURNAL