Missouri Aircraft Property Tax Framework

General Framework

Missouri imposes an annual business personal property tax on tangible personal property owned or held for use in a trade or business, including machinery, equipment, furniture, and similar assets. The tax is imposed pursuant to Chapter 137 of the Revised Statutes of Missouri (RSMo). Unlike other state taxes such as sales tax or income taxes, administration of property taxes is decentralized and managed at the county level. Valuation, assessment, billing, and collection are performed by county assessors and collectors in the jurisdictions where the property is located or used consistent with the administrative provisions of Chapter 137.

For most businesses with conventional operating assets, Missouri's system is designed to tax property based on its "true value in money", rather than original acquisition cost. Taxpayers annually report asset cost and acquisition year on a personal property declaration, and assessors apply recognized depreciation methodologies (§ 137.122), or valuation guides to estimate market value as of the statutory assessment date which is January 1st of a given assessment year. Once market value is determined, Missouri applies a uniform assessment ratio of 33⅓ percent (§ 137.115, RSMo) to business personal property, to arrive at assessed (taxable) value. That assessed value is then multiplied by the applicable local tax rates, which vary by county and by the combination of taxing districts in which the property is situated. Tax rates are determined annually based on the counties fiscal resources and budget requirements. While local tax rates differ among jurisdictions, Missouri applies a uniform framework statewide where business personal property is valued, adjusted for depreciation, assessed at 33⅓ percent, and subject to tax at applicable local rates.

Exception to Depreciation Rule for Aircraft

Pursuant to § 137.122(1), RSMo, property assessable under Chapter 155 (Taxation of Aircraft) is expressly excluded from the depreciation conventions otherwise authorized for business personal property. As a result, aircraft are not valued using cost-based depreciation schedules, but instead are assessed based on their true value in money, consistent with the general valuation standard set forth in § 137.115, RSMo. Accordingly, aircraft do not benefit from artificial depreciation reductions that mechanically abate value over time. Rather, any reduction in taxable value must be supported by a demonstrable decline in economic market value, based on characteristics of the specific aircraft, including year, make, model, condition, configuration, etc. applicable to the relevant assessment year.

Special Assessment Rules of Chapter 155 for Commercial Aircraft

Under § 155.010(4) of the RSMO a commercial aircraft is defined as the following: