Aircraft LLCs in California: what actually works

California has one of the biggest general-aviation communities in the country — Montgomery-Gibbs, Gillespie Field, and McClellan-Palomar around San Diego; John Wayne in Orange County; Van Nuys, Torrance, and Camarillo in the LA basin; San Carlos, Palo Alto, and Livermore around the Bay. It also has the most layered aircraft tax regime an owner is likely to meet: use tax when you buy, property tax every year you own, and a franchise tax on the entity that holds the plane. Most of that bill has nothing to do with whether you use an LLC.

This guide is general information, not legal or tax advice — California aircraft tax is genuinely specialist territory, and an aviation attorney or CPA who works these rules is worth every dollar.

Use tax

Self-reported

due within 12 months of purchase

Property tax

~1%+

of assessed value, every year

Franchise tax

$800/yr

if the plane means 'doing business'

Property threshold

$75,707

2025 'doing business' trigger

An LLC is still often the right way to own an aircraft here — for liability and co-ownership reasons that have nothing to do with tax. But you should walk in knowing what the LLC does and doesn’t change.

Tax #1: use tax when you buy

California dealers collect sales tax on aircraft they sell. But most GA transactions aren’t dealer sales — they’re private-party purchases, and those come with use tax instead, self-reported by the buyer to the CDTFA (California Department of Tax and Fee Administration). Use tax also applies when you buy out of state and bring the plane home.

Two details owners consistently get wrong:

• The rate follows the hangar, not your house. Use tax is charged at the rate in effect where you principally hangar the aircraft. Combined rates vary meaningfully across California districts, so a plane based at Gillespie can owe a different rate than one based at Livermore.
• You’re on a clock even if nobody bills you. The CDTFA expects self-reporting. Payment is due no later than the twelfth month following the month of purchase — or the month after the CDTFA contacts you, whichever comes first. Aircraft are easy to find: FAA registration data, airport hangar rolls, and county assessor records all feed the same machine.

The 12-month test and the interstate-commerce exemption

California doesn’t tax aircraft that genuinely weren’t purchased for use in California, and the dividing line is the 12-month test. An aircraft purchased out of state and brought into California within 12 months of purchase is presumed to have been purchased for California use — and taxable — if any of these holds: the buyer is a California resident, the aircraft becomes subject to California property tax, or it’s in California more than half the time. The presumption is rebuttable, but rebutting it means real evidence: flight logs, hangar invoices, out-of-state basing records. Bring the plane in after twelve months of genuine use elsewhere and it’s generally outside the presumption.

There’s also a working interstate/foreign commerce exemption: broadly, if the aircraft’s first functional use is outside California and, during the six months immediately following its first entry into the state, half or more of its flight time is commercial flight in interstate or foreign commerce, use tax may not apply. The CDTFA audits these claims hard — business-purpose documentation for each qualifying flight is the norm, not the exception. A common-carrier exemption also exists for aircraft genuinely used more than 50% in common carriage during the first 12 months; it’s a real exemption with real requirements, not a checkbox, and structuring into it is attorney-and-CPA work, not blog-post work.

Tax #2: county personal property tax, every year

This is the one out-of-state buyers don’t see coming. In California, aircraft are taxable personal property, and the county assessor appraises them every year at market value as of the January 1 lien date. Assessors don’t guess — the state prescribes the Aircraft Bluebook as the starting point. The bill lands on the unsecured roll of the county where the plane is habitually hangared, at roughly the 1% Proposition 13 base levy plus voter-approved local add-ons.

Concretely: a $200,000 Bonanza tied down at Camarillo generates a property tax bill on the order of $2,000+ a year, for as long as you own it. Counties cross-reference FAA registration data and airport tenant lists, and most send aircraft property statements to owners annually.

Note the interaction with the 12-month test above: becoming subject to California property tax is itself one of the triggers that presumes your purchase was for California use.

Tax #3: the $800 rule — the entity gets taxed too

California charges every LLC that is organized in California, registered with the California Secretary of State, or “doing business” in California an $800 annual franchise tax, plus an LLC fee at higher income levels and a Form 568 filing.

The phrase doing the heavy lifting is doing business. The FTB defines it as actively engaging in any transaction for financial gain — and backs that with bright-line thresholds under R&TC 23101: you’re doing business in California if your in-state sales, property, or payroll exceed annually indexed amounts (for 2025, roughly $757,070 of sales or $75,707 of property or payroll, or 25% of your totals). An airplane is property. Almost any airworthy airplane hangared in California blows through the property threshold by itself — which is how a Wyoming LLC whose only asset is a Cirrus at Palo Alto ends up with California filing obligations and an $800-a-year habit.

So is an out-of-state LLC pointless in California?

No — it’s just not a tax dodge. The honest scorecard for a Wyoming or Delaware holding LLC with a California-based aircraft:

The practical playbook

1. 1

   Decide the ownership structure first

   Solo, partnership, or LLC — work through the general aircraft-LLC tradeoffs before you price anything.

2. 2

   Price the California taxes into the purchase

   Use tax at your hangar’s rate, plus ~1%+ of value per year in property tax, plus $800/year if an LLC is in the picture. None of it is optional, so it belongs in your budget, not a surprise pile.

3. 3

   Chasing an exemption? Engage an aviation tax professional before closing

   Interstate-commerce and common-carrier exemptions are planned into a transaction, not claimed afterward.

4. 4

   Form the LLC where it makes structural sense

   For California-based owners that’s often simply a California LLC; a Wyoming or Delaware holding company is legitimate when privacy or multi-state structuring matters, with the taxes above unchanged either way.

5. 5

   Paper the operations

   Insurance in the LLC’s name, and leases that keep you out of Part 134½ territory.

Where FilingDesk fits

FilingDesk handles step 4: describe the holding company in plain English and we file it — a human specialist reviews every filing — then handle the EIN and operating agreement. $99 flat plus the state fee (Wyoming $199 all-in, Delaware $209, Florida $224), no upsells. California formation is on our roadmap; meanwhile, the use-tax and property-tax math above is the same no matter who forms your entity — budget for it honestly, and start the entity when your counsel signs off on the structure.

Frequently asked questions

Sources

• CDTFA — Tax Guide for Purchasers of Aircraft
• CDTFA — 12-Month Test FAQ (not purchased for use in California)
• California State Board of Equalization — Personal property FAQs (aircraft are taxable, annual appraisal)
• Orange County Assessor — Commercial & private aircraft assessments
• California FTB — Doing business in California (R&TC 23101 thresholds)
• California FTB — Limited liability company ($800 annual tax)

This guide is general information, not legal advice. FilingDesk is not a law firm.