The Indiana Form AE-3, titled “Annual Report of Exempt Aircraft Used in Public Transportation,” is a mandatory compliance document for aircraft owners who claim a sales or use tax exemption based on leasing their aircraft for public transportation purposes. Under Indiana Code 6-2.5-5-8(h), if you purchased an aircraft tax-free with the intent to rent or lease it for public transit (essentially operating it as a charter or for-hire vehicle under FAA Part 135 regulations), you must prove to the state annually that the aircraft is actually being used for that purpose. This form acts as your yearly “proof of eligibility,” detailing flight hours, lease agreements, and federal excise tax payments to verify that your business operations still qualify for the tax break. Failing to file this report or providing insufficient documentation can result in the retroactive denial of your exemption, forcing you to pay the full sales or use tax on the aircraft’s original purchase price—a potentially massive financial penalty.
How To File Indiana AE-3
You must file this report annually, with a strict deadline: it is due 30 days after the end of the anniversary month in which the aircraft was originally placed in service for leasing. For example, if you started leasing the aircraft in June, your report is due every year by July 30th. The completed form, along with all required supporting documentation (specifically your FAA Part 135 Certification, operating specifications, and proof of Federal Excise Tax payment), should be mailed to the Indiana Department of Revenue’s Special Tax – Aeronautics division. The mailing address is P.O. Box 644, Indianapolis, IN 46206-0644. Alternatively, you can fax the documents to the number listed on the form if accepted, but certified mail is often safer for tracking important tax documents.
How To Complete Indiana AE-3
FAA N Number
Enter the official N-Number (registration number) assigned to the aircraft by the Federal Aviation Administration (e.g., N12345).
Aircraft Serial Number
Provide the specific manufacturer’s serial number for the aircraft frame, which can be found on the aircraft’s data plate or registration documents.
Base Airport
List the name or code of the airport where the aircraft is primarily hangared or stationed when not in flight.
Registered Owner Of Aircraft: Name
Enter the full legal name of the individual or entity that officially holds the title to the aircraft.
Federal ID Number / Indiana Taxpayer ID Number (Owner)
Input the owner’s Federal Employer Identification Number (FEIN) or their 10-digit Indiana Taxpayer Identification Number (TID).
Telephone Number (Owner)
Provide a direct contact phone number for the registered owner.
Street Address, City, State, ZIP Code (Owner)
Complete the full mailing address for the registered owner.
Aircraft Leased To: Name
Enter the full legal name of the person or company to whom the aircraft is currently leased (the lessee/operator).
Federal ID Number / Indiana Taxpayer ID Number (Lessee)
Provide the FEIN or Indiana TID for the lessee listed above.
Telephone Number (Lessee)
Input the contact phone number for the lessee.
Street Address, City, State, ZIP Code (Lessee)
Complete the full mailing address for the lessee.
Date Of Use
In this column, list the specific dates or date ranges (e.g., by month) for which you are reporting flight activity.
Total Hours Flown
For each date or period listed, record the total number of flight hours the aircraft operated, regardless of the mission type.
Type Of Flight: Part 135 Or Part 91
For each entry, check the appropriate box to indicate whether the flights were conducted under FAR Part 135 (commercial/charter, which qualifies for the exemption) or Part 91 (general aviation/private use). You may need to separate hours if both types occurred in the same period.
Amount Of Federal Excise Tax Collected & Remitted
Enter the exact dollar amount of Federal Excise Tax (FET) that was collected and paid to the IRS for the commercial (Part 135) flights listed. This serves as financial proof of commercial activity.
Total Hours Flown (Bottom Row)
Sum up the “Total Hours Flown” column to provide the aggregate flight time for the reporting year.
Total Hours Flown Part 91
Calculate and enter the total number of hours flown under Part 91 (non-commercial) regulations for the entire year.
Total Hours Flown Part 135
Calculate and enter the total number of hours flown under Part 135 (commercial/public transportation) regulations for the entire year.
Percentage Of Public Transportation Use
Divide the “Total Hours Flown Part 135” by the “Total Hours Flown” and multiply by 100 to determine the percentage. This figure demonstrates whether the aircraft met the predominant use requirement for the exemption.
Signature Of Authorized Person
The owner or an officially authorized representative must sign the form to certify that the information is accurate under penalty of perjury.
Date
Enter the date the form was signed.
Printed Name Of Authorized Person
Clearly print the name of the person who signed the form.
Title
State the official job title or capacity of the signer (e.g., Owner, President, Chief Pilot).