The Montana LLC airplane pitch is the aviation version of the boat and RV schemes, and like both of them it’s half true. Montana genuinely charges no sales tax, and instead of property tax it charges registered aircraft a flat annual fee in lieu of tax — as little as $30 a year for anything over 40 years old. For an airplane hangared in Kalispell, that’s simply the law working as written. For an airplane hangared anywhere else, the Montana LLC on the title saves nothing — because use tax follows the hangar, and tax agencies know exactly how to find a hangar.
The pitch, and the half of it that’s true
Search “Montana LLC airplane” and you’ll find the same registered-agent industry that sells Montana RV and boat setups: form a Montana LLC, register the aircraft to it, and pay zero sales tax — because Montana has none. On a $400,000 used turboprop in a 6–7% state, the brochure math claims tens of thousands in “savings.”
Here’s what the brochure gets right. Montana levies no general sales or use tax. Better still for aircraft owners, Montana doesn’t assess property tax on registered aircraft at all — it charges a fee in lieu of tax, a flat annual amount set by statute that scales with the aircraft’s type and age, and MCA 67-3-204 says aircraft that pay it are “exempt from all other taxation.” None of that is a loophole. It’s Montana’s actual tax structure, and for the owner flying out of Bozeman or Missoula it’s simply how aircraft ownership works.
What the brochure leaves out is that Montana’s rules stop at Montana’s border. The state where the aircraft actually lives has its own rules — a use tax that mirrors its sales tax, usually an annual property or registration tax of its own — and both attach to the aircraft’s presence there, not to the name on the FAA certificate.
What Montana actually charges an aircraft based there
Montana’s numbers are worth seeing in full, because they’re the true half of the pitch. State registration runs through the MDT Aeronautics Division — separate from FAA registration — and the annual payment is the fee in lieu of tax from MCA 67-3-206:
- Sales/use tax
- $0
- Montana levies none
- New 172-class single
- $450/yr
- fixed gear, ≤200 hp, 0–5 yrs
- Any aircraft 40+ yrs old
- $30/yr
- flat, incl. antiques & homebuilts
- Jet, 0–5 yrs old
- $4,500/yr
- top of the schedule
| Aircraft type (MCA 67-3-206) | 0–5 yrs | 6–10 yrs | 11–20 yrs | 21–30 yrs | 31–40 yrs |
|---|---|---|---|---|---|
| Single engine, fixed gear, 200 hp and under | $450 | $262.50 | $150 | $75 | $37.50 |
| Single engine, fixed gear, over 200 hp | $750 | $375 | $225 | $112.50 | $75 |
| Single engine, retractable gear, 200 hp and under | $900 | $450 | $262.50 | $150 | $112.50 |
| Single engine, retractable gear, over 200 hp | $1,050 | $600 | $300 | $187.50 | $150 |
| Multi-engine, piston engine | $1,200 | $750 | $375 | $262.50 | $225 |
| Helicopter, piston engine | $1,050 | $675 | $337.50 | $225 | $187.50 |
| Single engine jet helicopter, prop jet | $2,250 | $1,050 | $675 | $450 | $262.50 |
| Multi-engine jet helicopter, prop jet | $3,000 | $1,500 | $900 | $600 | $300 |
| Jet engine, no propeller | $4,500 | $2,250 | $1,200 | $750 | $375 |
| Glider, ultralight, gyrocopter, balloon, homebuilt, antique — or any aircraft over 40 years old | $30 flat | ||||
Read that last row again: a 1978 Skyhawk based in Montana pays a flat $30 a year in lieu of property tax. That’s not a scheme — it’s a genuinely aircraft-friendly tax code for aircraft that are genuinely there.
The mechanics, straight from the statutes and MDT: register within 30 days of acquiring the aircraft (MDT’s stated deadline), renew on or before March 1 each year (MCA 67-3-201), and display the current-year decal — an aircraft subject to the fee may not be operated in Montana without it. File late and MCA 67-3-202 adds a penalty of five times the annual fee. The LLC side is cheap too: Montana’s Secretary of State charges $35 to file Articles of Organization, and the annual report fee is currently waived when filed by the April 15 deadline ($35 after).
Use tax: the half the pitch leaves out
Every state with a sales tax has a matching use tax at the same rate. Sales tax applies when you buy in the state; use tax applies when you buy elsewhere and then use or store the property in the state. It exists precisely to close the “I bought it out of state” gap — including the “an out-of-state LLC bought it” version. For aircraft, the rule that decides nearly every audit is one sentence: use tax follows where the aircraft is hangared, not where the owning entity was formed.
| Where the aircraft is hangared | Montana LLC on the title | What actually happens |
|---|---|---|
| Kalispell or Bozeman, MT | Legitimate owner | No sales or use tax — Montana levies none. Fee in lieu of tax per the schedule above, MDT registration by March 1, decal on the aircraft. |
| San Diego or the Bay Area, CA | Changes nothing | CDTFA use tax at the rate where the plane is principally hangared, no cap. An aircraft brought in within 12 months of purchase is presumed bought for California use if the buyer is a resident, the plane becomes subject to CA property tax, or a nonresident keeps it there more than half the time. County assessors bill annual personal property tax on top, and an LLC doing business in California picks up the $800 franchise tax. |
| Fort Lauderdale Executive or Tampa, FL | Changes nothing | Florida’s 6% use tax plus county surtax (on the first $5,000 of price) applies to aircraft used or stored in the state, per DOR brochure GT-800008. A nonresident’s aircraft stays exempt only if it’s in Florida 20 days or less during the 6 months after purchase (training and repair days excluded) — see our Florida aircraft LLC guide. |
| Addison or Austin, TX | Changes nothing | Texas use tax applies to the aircraft where it’s based and used — the Montana paperwork is irrelevant to the Comptroller. |
The Montana LLC only removes tax in the one row where there was no tax to remove. Everywhere else, use tax attaches to the aircraft’s presence, and most hangar states add their own recurring bill — California’s county property tax being the expensive example — that a Montana registration doesn’t touch either.
One Florida detail deserves its own sentence, because the scheme is often pitched around it: Florida’s fly-away exemption (take dealer delivery, remove the aircraft within 10 days, or 20 after repairs) is real — but GT-800008 says it does not apply to a Florida resident, an entity whose controlling person is a Florida resident, or a corporation with Florida-resident officers or directors. Florida wrote the look-through rule directly into the exemption. A Montana LLC with a Floridian behind it doesn’t qualify, and a false affidavit carries a mandatory 200% penalty, a fine up to $5,000, and up to 5 years of criminal exposure.
How states catch Montana LLC airplanes
An airplane never wears a Montana plate — the N-number is federal, so nothing on the airframe advertises the scheme the way Montana plates on an RV do. Tax agencies don’t need it to. They work from the ground up:
- Hangar leases and airport tenant records. A hangar or tie-down rented year-round at a California or Florida airport, billed to a Montana LLC, is the entire case in one document. Airport authorities are public landlords; their tenant lists are discoverable.
- County assessor rolls. States that assess aircraft as personal property — California among them — have assessors whose job is literally walking the field and reconciling every based aircraft against ownership records.
- FAA registry cross-referencing. The registry is public and searchable. An aircraft registered to a Montana address that’s based, maintained, and fueled a thousand miles away is a mismatch that data-matching programs are built to flag.
- Insurance and maintenance paper. Your policy names the aircraft’s base; your shop invoices name the field where the work was done. Both are discoverable, and both are honest even when the registration isn’t.
- Flight-tracking data. ADS-B is public. An aircraft that departs and returns to the same non-Montana airport several hundred times a year has told everyone where it lives.
The Montana LLC doesn’t hide the aircraft — the hangar gives it away. And unlike a boat slip, an aircraft’s base leaves a paper trail with a government landlord, a federal registry, and a public flight log all pointing at the same field.
The federal layer: the FAA doesn’t care about Montana either
Everything above is state tax. Aircraft add a federal layer that the boat and RV versions of this scheme don’t have, and a Montana formation does nothing for any of it.
Registration is federal and cheap. The aircraft registers with the FAA — AC Form 8050-1, a $5 fee, a certificate good for seven years — under 14 CFR Part 47. An LLC can be the registered owner only if it qualifies as a U.S. citizen: a member-managed LLC whose members are all U.S. citizens qualifies; otherwise the FAA applies the corporate test — at least two-thirds of the managing officials and 75% of the voting interest must be U.S.-citizen held. Every LLC applicant also files the FAA’s LLC statement in support of registration identifying each member — and if a member is itself an LLC, the analysis recurses into that one too. Montana, Wyoming, Delaware: the FAA applies the same test to all of them.
The flight department company trap applies to every state’s LLC equally. An LLC whose only business is owning an airplane, collecting money from its own members for flights — even bare cost reimbursement — can be treated by the FAA as an uncertificated charter operation, with per-flight penalties and insurers positioned to deny claims. This is the single most expensive mistake in aircraft LLC structuring, it has nothing to do with taxes, and no formation state avoids it. We cover it in depth — dry leases, 91.501 arrangements, and why this needs an aviation attorney — in our national aircraft LLC guide.
When a Montana LLC is genuinely the right call
None of this makes Montana LLCs illegitimate — it makes the tax-dodge use illegitimate. The honest cases:
The aircraft actually lives in Montana
If you fly out of Kalispell, Bozeman, Missoula, or a grass strip in the Flathead, a Montana LLC is a perfectly clean owner: no sales tax because Montana charges none, a flat fee in lieu of property tax that’s modest for most GA aircraft (and $30 for anything over 40 years old), and state registration that’s a decal and a March 1 renewal. Montana pilots use LLCs for the same reasons owners everywhere do — liability separation, partnership structure, keeping a personal name out of the public registry.
Liability, co-ownership, and registry privacy — anywhere
Like any LLC, a Montana LLC can hold an aircraft to separate aircraft liability from your personal assets, give co-owners an operating agreement instead of a handshake, and put an entity name rather than your own on every public N-number lookup. Those benefits are real and portable. What they are not is a reason to claim the aircraft lives in Montana when its hangar lease says Scottsdale — you can get every one of them from an LLC formed in your home state or in Wyoming, without stacking an audit trigger on top of a tax bill you owe either way.
The honest structure: home-state or Wyoming holding LLC
If your aircraft lives outside Montana, the structure that holds up is straightforward:
- 1
Form the holding LLC in the aircraft's home state, or in Wyoming
Wyoming is the standard pick for a clean holding company — low fees, strong charging-order protection, members off the public record. Every state’s LLC needs a registered agent; FilingDesk includes one free for the first year on every formation.
- 2
Pay the use tax your hangar state actually charges
Budget it into the purchase. It’s a real, known, one-time cost — not an open-ended liability accruing interest. Check your state’s aircraft-specific rules first: fly-away and casual-sale exemptions legitimately reduce or eliminate the bill in many states when the paperwork is done right and on time.
- 3
Register with the FAA correctly the first time
AC Form 8050-1, the $5 fee, and a properly drafted LLC citizenship statement. Get the membership and management structure right at formation — retrofitting citizenship compliance after the registry has processed a defective filing is a miserable conversation with your lender and insurer.
- 4
Paper the operations with an aviation attorney
If anyone — including you — will pay anything toward flights, have counsel structure the dry lease or cost-sharing arrangement before the first flight, not after the FAA asks. And tell your insurer the truth about the entity, the leases, and who flies.
You still get liability separation, a real operating agreement, and registry privacy. You just don’t pretend the aircraft is somewhere it isn’t — and you don’t hand an auditor a paper trail that starts with a state you’ve never flown to.
Where FilingDesk fits
FilingDesk forms Wyoming, Delaware, and Florida LLCs today — flat $99 plus the state fee (Wyoming $199, Delaware $209, Florida $224 all-in), with a human specialist reviewing every filing, EIN and operating agreement included, and no upsells. We don’t file Montana LLCs, and we won’t sell you this scheme: if your aircraft is hangared outside Montana, a Montana LLC will not erase your hangar state’s use tax, and registering the plane in your tie-down row to one is an audit file waiting to be opened. Form the entity for the real reasons — liability, co-ownership, privacy, a clean holding structure — and when you’re ready, start here.
FilingDesk is not a law firm and does not provide legal or tax advice. This guide is general information only; consult a licensed aviation attorney and a CPA about your specific aircraft and situation.
Frequently asked questions
Does a Montana LLC avoid sales tax on an airplane?
Does Montana charge property tax on aircraft?
Do I have to register my airplane with the State of Montana?
How do states catch airplanes held by Montana LLCs?
Can my Montana LLC take delivery in Florida tax-free under the fly-away exemption?
When does a Montana LLC actually make sense for an airplane?
Sources
- Montana Department of Revenue — Montana has no general-use sales tax
- MCA 67-3-206 (2025) — Schedule of fees in lieu of tax for aircraft
- MCA 67-3-204 (2025) — Fee in lieu of tax on registered aircraft (in lieu of property tax; decal requirement)
- MCA 67-3-201 (2025) — Aircraft registration required; renewal on or before March 1
- MCA 67-3-202 (2025) — Penalty of five times the annual fee for late registration
- Montana Department of Transportation — Aeronautics Division aircraft registration
- Montana Secretary of State — Business filing fee schedule
- CDTFA — Tax Guide for Purchasers of Vehicles, Vessels, & Aircraft: Aircraft (12-month presumption)
- Florida DOR — Sales and Use Tax on Aircraft (GT-800008)
- eCFR — 14 CFR Part 47, Aircraft Registration (citizenship, application, duration)
- FAA Aircraft Registry — Limited Liability Companies info sheet (LLC statement requirements)
This guide is general information, not legal advice. FilingDesk is not a law firm.