How are aircraft rentals and memberships taxed?

The state of Arizona taxes our operations under the Transaction Privilege Tax or TPT. The cities of Cottonwood and Prescott also have sales tax that we must pay. Aircraft rental rates quoted do not include tax, which is added at the time of purchase.

With the change to separate fuel and aircraft rental on customer invoices, TPT tax is only collected on the actual aircraft rental. Taxes for fuel are already collected when Leighnor Aircraft LLC purchases fuel from the FBO.

Taxes are also collected on Wings Above Yavapai memberships and are collected each month with the membership dues.

Both Prescott and Cottonwood are subject to airport use fees, but they are handled differently due to Arizona law. Cottonwood’s use fee is figured in as sales tax which is added to the purchase price. For Prescott, their use fee was put in place after an Arizona law change which requires all use fees to be part of the actual price. This is why the aircraft at Cottonwood and Prescott have different prices as Prescott’s use fee has to be part of the actual rental price.

Category: Rates and Financial