AZ State TPT Paid on Aircraft Purchased...

[GCalvin73]

Hello,

Looking for help on how to report/deduct the $15,021 Arizona Transaction Privilege Tax that we paid on an aircraft we purchased in 2022.

The aircraft is owned as a two-person partnership and we split the TPT bill evenly. The aircraft is NOT used for business purposes.

Is this a "personal property tax" for federal filing purposes?

How is it filed in the AZ taxes section?

It's assumed that we each only file the portion we paid. Is this correct?

Thanks in advance.

[MaryK4]

The Transaction Privilege Tax should be a business expense deduction on the partnership return that will decrease your partnership income.  It cannot be used as a personal property tax because the partnership owns the aircraft.  The amount that you each pay essentially acts as a contribution and increases your basis.