Which States Require Aircraft Mileage Apportionment?

If your company owns or operates aircraft across state lines, nearly every state with a corporate income tax will require you to apportion your income using mileage. But the specific formula, the definition of "miles," and whether empty legs are included varies significantly from state to state.

This reference guide covers the framework most states use, highlights the states with specific aviation apportionment rules, identifies states where no corporate income tax applies, and provides a full 50-state reference table. Because state tax law changes frequently, each entry notes whether independent verification is recommended before filing.

Why Aircraft Mileage Drives State Apportionment

Most states impose corporate income tax on multistate businesses based on the proportion of their business activity occurring within that state. For companies that operate aircraft, state tax authorities measure "activity" using mileage — the miles flown within a state compared to total miles flown everywhere. The resulting percentage (the apportionment fraction) is applied to the company's total income to determine what portion is taxable in that state.

This mileage-based approach is codified in the Uniform Division of Income for Tax Purposes Act (UDITPA), first adopted by the Multistate Tax Commission (MTC) in 1957 and since enacted in various forms by the majority of states. For transportation and aviation companies, UDITPA and the MTC model rules substitute a transportation-specific mileage factor for the standard sales factor used by other industries.

Two Key Questions That Determine Your Formula

Before looking at the state table, two questions determine which rules apply to your situation:

1. Are you a "transportation company" under state law?

States typically distinguish between:

• Air transportation companies — airlines, charter operators, fractional ownership programs, and other businesses whose primary activity is transporting passengers or cargo for hire. These entities use transportation-specific mileage apportionment in nearly every state that has a corporate income tax.
• General business corporations that own aircraft — a manufacturing company, law firm, or holding company that operates a jet for internal business travel. In many states, these entities use the standard multi-factor apportionment formula, with aircraft ownership feeding into the property factor rather than a transportation-specific mileage factor. However, a growing number of states apply transportation apportionment rules to any company whose "primary business" involves transportation — which can sweep in operators that primarily use aircraft for executive travel.

This distinction is the most common source of apportionment disputes for business aircraft owners. When in doubt, treat the aircraft as triggering transportation apportionment rules and confirm with your tax advisor.

2. Does your state use revenue miles or total miles?

For transportation companies, apportionment fractions are computed as miles in state divided by total miles. The critical question is whether "total miles" includes empty/positioning legs or only revenue-generating flights. See our article on Empty Legs and Revenue-Mile Apportionment for a full explanation of how this distinction works and why it matters.

States With No Corporate Income Tax

A small number of states have no traditional corporate income tax. For these states, aircraft mileage apportionment for income tax purposes is not applicable — though other state taxes (sales tax, use tax, property tax, excise tax) may still apply to aircraft operations. These states are:

States With Specific Aviation Apportionment Rules

The following states have codified aviation-specific or transportation-specific apportionment rules that directly govern how aircraft mileage is calculated. These are the states where your mileage data has the most direct and documented legal significance.

Florida

Florida is the most extensively documented state for aircraft mileage apportionment. Under §220.151(2)(c), Florida Statutes, air transportation companies apportion income using revenue miles — empty and positioning legs are excluded from both numerator and denominator. Florida also applies a unique statutory geographic boundary (the "Florida Box") that extends beyond the state's physical coastline into the Gulf of Mexico and Atlantic Ocean.

The 2025 ruling in JetBlue Airways Corp. v. Florida Department of Revenue upheld Florida's statutory mileage apportionment method, confirming that revenue-mile apportionment under §220.151 satisfies constitutional commerce clause standards. See our dedicated article: The Florida Box and Aircraft Tax Apportionment.

California

California's apportionment rules for air transportation companies are governed by Cal. Code Regs. Tit. 18, §§ 25137-7 (Air Transportation Companies — Allocation and Apportionment of Income). The regulation covers scheduled airlines, supplemental airlines, and air taxis — where "air taxis" means operators of aircraft under 12,500 lbs maximum certificated takeoff weight that do not hold DOT economic authority.

For tax years beginning on or after January 1, 2013, R&TC §25128.7 mandates a single-factor receipts/sales formula. Under the regulation, the sales factor numerator (California-sourced revenue) is determined using a weighted two-part formula, applied separately by aircraft model:

• 80% weight — Air time ratio: The block-to-block air time spent within California divided by total block-to-block air time everywhere. "Air time" runs from the moment wheel chocks are removed before departure to when they are placed after landing — it does not include pre-flight or post-flight ground activities unless the aircraft is a flight crew payroll calculation.
• 20% weight — Arrivals & departures ratio: The number of California arrivals plus California departures divided by total arrivals plus total departures everywhere, excluding flight training operations.

Annual statistics for the income year are preferred. If unavailable, representative periods designated by the State Board of Equalization (coordinated with FTB) may be used with prior FTB approval. Calculations must be maintained separately for each aircraft model group (e.g., all Citation CJ3s as one group, all Gulfstream G650s as another).

Scope note: This regulation applies to air transportation companies — entities holding or operating under DOT certificates, air carrier certificates, or equivalent authority, and air taxis as defined above. Purely private operators who use aircraft solely for their own business travel (not providing air transportation as a service) may fall outside this regulation's scope entirely. The applicable apportionment method for those operators should be confirmed with a California tax advisor.

New York

New York's corporate franchise tax (Article 9-A) apportions receipts from aviation services under Tax Law §210-A(7). For most aviation operators (all services other than air freight forwarding acting as principal), the receipts fraction is the arithmetic average of three separate percentages, each computed with a 60% cap on the numerator:

• Factor (i) — Arrivals & Departures: (60% × NY aircraft arrivals and departures) ÷ total arrivals and departures everywhere. Excludes maintenance/repair-only stops, refueling stops without passenger embarkation, ferry flights, personnel training flights, and emergency arrivals. Non-revenue flights transporting employees for maintenance or emergency purposes may also be excluded by the commissioner.
• Factor (ii) — Revenue Tons: (60% × NY revenue tons handled) ÷ total revenue tons everywhere. Revenue tons = revenue passengers at 200 lbs per passenger plus revenue cargo, counted when first received as originating or connecting traffic or finally discharged.
• Factor (iii) — Originating Revenue: (60% × NY originating revenue) ÷ total originating revenue everywhere. Originating revenue means receipts from transporting revenue passengers and revenue property first received at airports as originating or connecting traffic.

The NY receipts fraction = (Factor i + Factor ii + Factor iii) ÷ 3. All such receipts are included in the denominator regardless of where the flight operates.

A separate rule applies to air freight forwarders acting as principal (§210-A(7)(a)): 100% of receipts in the NY numerator if both pickup and delivery are in New York; 50% if either is in New York.

Scope note: These rules apply to providers of aviation services. The arrivals and departures factor can be computed directly from flight records; the revenue tons and originating revenue factors require financial and cargo data from your accounting records, not just flight logs. Confirm applicability and any exclusions with a New York tax advisor.

Illinois

Illinois imposes its corporate income tax under the Illinois Income Tax Act (IITA). Air transportation companies are subject to special apportionment rules under 35 ILCS 5/304(d), which uses a mileage-based factor: Illinois aircraft miles divided by total aircraft miles. Illinois follows the MTC model approach for transportation companies and historically has used total miles (not revenue-only miles) for the denominator, though this should be verified for the current filing period.

Illinois has an important additional requirement: mileage must be measured using "most common route" standard distances derived from DOT T-100 Segment Data, rather than straight-line great-circle calculations. This rule is codified in 86 Ill. Admin. Code 100.3450. For each flight segment with an Illinois origin or destination, the applicable distance is the average non-stop segment distance reported by all carriers for that city pair in the most recent DOT T-100 filing — not the direct geodesic distance your GPS would calculate.

In practice, the difference between great-circle and T-100 distances is usually small (often under 1%), but it is a compliance requirement. For routes not covered by T-100 data (e.g., charter-only or infrequently served airports), a standard 1.03× great-circle buffer is the accepted industry estimate.

A critical and often-overlooked rule governs which flights may contribute miles to the Illinois numerator at all: only flights that begin or terminate at an Illinois airport generate Illinois revenue miles. Flights that merely pass over Illinois airspace — commonly called "flyover miles" — are explicitly excluded from the numerator. The regulation provides that Illinois miles are measured from the point where the route intersects the Illinois border to the Illinois airport where the flight begins or terminates. This was affirmed in Northwest Airlines, Inc. v. Department of Revenue, 295 Ill. App. 3d 889, 692 N.E.2d 1264 (1998), appeal denied, 179 Ill. 2d 589, 705 N.E.2d 440 — a common source of compliance errors when airlines attempt to include transiting flights. AircraftTaxSoftware.com handles this correctly: the T-100 standard distance lookup and the PostGIS boundary intersection both operate only on flights with an Illinois origin or destination, so flyover-only legs never enter the apportionment numerator.

Connecticut

Connecticut imposes its Corporation Business Tax under Conn. Gen. Stat. §12-218. Air carriers file a special apportionment schedule, Form CT-1120A-A, which replaces the standard apportionment schedules. The formula is an arithmetic average of three equally-weighted factors: (1) arrivals and departures, (2) revenue tons handled, and (3) originating revenue. The final apportionment fraction is the sum of the three factor ratios divided by three.

Factor 1 — Arrivals and departures: CT arrivals plus CT departures, divided by total arrivals and departures everywhere. Critically, the form specifies "both scheduled and non-scheduled" flights — meaning all flights count, regardless of whether they carry passengers or cargo for compensation. This is broader than some other states and includes positioning, ferry, and empty-leg flights. AircraftTaxSoftware.com computes this factor directly from your flight records.

Factor 2 — Revenue tons handled at CT airports: The weight in tons of revenue passengers (at 200 pounds per passenger) and revenue cargo first received or finally discharged at Connecticut airports, divided by total revenue tons handled everywhere. This requires passenger count and cargo weight data not tracked in flight logs — it must be sourced from your operational or cargo records. Factor 3 — Originating revenue within Connecticut: Revenue from passengers and cargo first received at Connecticut airports as originating or connecting traffic, divided by total revenue everywhere. This is a financial figure from your accounting records.

Connecticut's "air carrier" definition is broadly written: any entity that transports persons or property by air for hire and makes landings, takeoffs, or air pickups or deliveries in Connecticut. This may encompass a wider range of operators than a strict commercial-airline definition, so confirm applicability with a Connecticut tax advisor if you operate on a charter or fractional basis.

Massachusetts

Massachusetts imposes its corporate excise tax under M.G.L. c. 63. For airlines, the Department of Revenue has issued 830 CMR 63.38.2, which departs significantly from the mileage-based MTC model used by most other states. Massachusetts uses a three-factor apportionment formula — property, payroll, and sales — and both the property and payroll factors are driven by aircraft departure percentages, not miles flown.

The property factor apportions aircraft value to Massachusetts by the percentage of each aircraft type's departures occurring in Massachusetts: (total average value of that aircraft type) × (MA departures of that type ÷ total departures of that type). Non-aircraft property (ground equipment, offices, etc.) is apportioned by physical location in the usual way. The payroll factor applies the same departure weighting to flight personnel: total flight payroll is multiplied by the value-weighted MA departure percentage across all aircraft types. Non-flight personnel payroll is apportioned by where those employees are stationed. The sales factor is determined under the general corporation rules at 830 CMR 63.38.1(9) — it is not modified by 63.38.2 and typically follows destination-based revenue sourcing, requiring financial data from your accounting records.

A "departure" under 830 CMR 63.38.2 is defined as a take-off by an aircraft with passengers or freight — a revenue-flight concept. Positioning and ferry flights without passengers or cargo are not departures under this definition, and using the Revenue Only basis in the report aligns with this requirement. AircraftTaxSoftware.com's Massachusetts report computes the departure factor inputs for each aircraft: Massachusetts departure count, total departure count, and MA departure percentage by tail number. Aircraft fair market values (by type) and payroll data must be supplied from your financial records to complete the full three-factor calculation.

North Carolina

North Carolina imposes its corporate income tax under G.S. §105-130.4. For most corporations the statute now uses a single sales factor (market-based sourcing) under subsection (l). However, air transportation corporations are governed by a distinct rule in subsection (s), which uses a single-factor formula based on revenue ton miles rather than plain miles: NC revenue ton miles ÷ total revenue ton miles everywhere.

A revenue ton mile is one ton of passengers, freight, mail, or other cargo carried one mile. For this calculation a passenger counts as 200 pounds (0.1 ton). This means the numerator and denominator are not simply miles flown — they are miles weighted by the load carried on each flight. An empty-leg or positioning flight with no passengers or cargo produces zero revenue ton miles, making this formula structurally different from a pure mileage apportionment. To compute NC revenue ton miles you need both the miles flown in North Carolina (which AircraftTaxSoftware.com calculates via PostGIS boundary intersection) and the passenger count or cargo weight for each flight, which must come from your operational records.

An important threshold question is whether the subsection (s) formula applies at all. North Carolina defines an "air carrier" as a corporation engaged in transporting passengers or property in interstate commerce where the majority of the corporation's revenue ton miles everywhere are attributed to aircraft transportation. Many business aviation operators — corporate flight departments, fractional ownership programs, and private aircraft owners — may not meet this definition, and would instead apportion under the general single sales factor of subsection (l) rather than the revenue ton mile formula of subsection (s). Confirm which subsection applies with a North Carolina tax advisor before building your apportionment schedule.

Minnesota

Minnesota imposes its corporate income tax under Minn. Stat. §290.17. For air carriers, Minnesota Administrative Rule 8017.6000 prescribes a special apportionment method because, as the rule states, "the nature of the air carrier business requires use of a method other than those prescribed by Minnesota Statutes, section 290.191." The method is a modified three-factor formula — property, payroll, and receipts — where each factor is adjusted using airline-specific metrics: the Minnesota plane mile ratio and Minnesota departures.

The Minnesota plane mile ratio (MN plane miles ÷ total plane miles, computed separately per fleet type) is the central driver of both the property and payroll factors. Flight property (aircraft) is apportioned to Minnesota by multiplying the aircraft's original cost by this ratio. Flight payroll is apportioned by multiplying total flight crew payroll by this ratio. "Minnesota plane miles" are defined as airport-to-airport mileage (as determined by the U.S. Department of Transportation) multiplied by the proportion of the route that falls within Minnesota's borders — essentially the same geodesic boundary-intersection calculation that AircraftTaxSoftware.com performs via PostGIS. The rule specifies DOT airport-to-airport distances, not great-circle, so there may be minor differences from our geodesic calculation, but the methodology is equivalent.

The receipts factor numerator uses a blended formula: 85% weighted by ton-mile ratios + 15% weighted by Minnesota departure ratios. The departure component — Minnesota departures ÷ total revenue departures — is something AircraftTaxSoftware.com can compute directly from flight records. The 85% ton-mile component (passenger ton miles, cargo ton miles, mail ton miles, each in Minnesota versus total) requires passenger counts, cargo weights, and revenue data from operational and financial records.

An important threshold question applies before any of this is relevant: Minnesota's "air carrier" definition is narrow — "a person engaged in the paid carriage of passengers, cargo, or mail on regularly scheduled flights of aircraft." The phrase "regularly scheduled" is critical. Charter operators, corporate flight departments, fractional owners, and private aircraft operators are generally not air carriers under this definition and would instead apportion under the general Minnesota rules of §290.191. Confirm which framework applies with a Minnesota tax advisor.

AircraftTaxSoftware.com's Minnesota report provides the two flight-data inputs that feed all three factors: the MN plane mile ratio (from PostGIS boundary intersection) and the MN departure ratio. Property values by aircraft type, flight payroll, and revenue by carriage category (passengers, cargo, mail) must come from your financial and operational records to complete the full calculation.

Georgia

Georgia imposes a special air carrier apportionment formula under O.C.G.A. §48-7-31(d)(2.1) for corporations whose business is principally derived from revenue flight operations. The formula replaces the standard single-sales-factor with a weighted three-factor calculation: 25% revenue air miles factor + 25% tons handled factor + 50% originating revenue factor.

Each factor is computed as a Georgia-to-everywhere ratio. The revenue air miles factor weights passenger miles by passenger count; the tons handled factor covers cargo and mail tonnage loaded and unloaded; and the originating revenue factor covers all revenue from flights originating in Georgia. These inputs explicitly reference Department of Transportation accounting under 49 U.S.C. §1301 and 14 C.F.R. Part 241 — the commercial airline uniform system of accounts — making the formula applicable in practice to certificated air carriers, not to typical business aviation operators.

Business aviation operators and charter companies generally do not qualify for the §(d)(2.1) air carrier formula and instead apportion income under the standard Georgia rules. If you are a certificated carrier with DOT accounting records, the three Georgia factors must come entirely from your passenger, cargo, and revenue data — none of the three can be derived from our flight-log data alone — so AircraftTaxSoftware.com does not provide a Georgia-specific report module. Your §(d)(2.1) inputs should come directly from your DOT-compliant traffic and revenue records.

The MTC Model: A Terminal-Based Approach

The majority of states that impose a corporate income tax have adopted some version of the Multistate Tax Commission (MTC) model apportionment regulations for airlines (Reg. IV.18.(e), originally adopted July 14, 1983). Unlike legacy formulas that track every mile flown (including "flyover miles" through a state's airspace), the 1983 MTC model established a departure-weighted approach.

Under the 1983 model, the property, payroll, and receipts factors are all driven by a ratio of weighted departures (take-offs) in the state compared to departures everywhere. This "terminal-based" logic reflects the principle that income is generated where an airline has a physical presence and provides service, rather than simply where it travels.

Individual states frequently modify the MTC model through their own statutes. As noted in the table below, while the MTC model is departure-based, a significant number of states (such as Florida and Illinois) still rely on mileage-based statutes that include flyover activity or specific "revenue mile" definitions.

The most dangerous assumption in multi-state aircraft apportionment is that your entity "isn't a transportation company." Several states will disagree with that characterization if aircraft usage is significant, and they will assess tax accordingly. Log every flight, calculate both total and revenue miles, and let your advisor confirm the right formula per state — and watch for state-level adoption of the revised MTC departure-based model.

Full 50-State Reference Table

The table below reflects our current understanding of each state's corporate income tax structure and its general approach to aviation/transportation apportionment. Entries marked Verify should be confirmed before filing.

Trend Watch: As of 2026, we are observing a significant shift away from legacy mileage-based formulas toward departure-based apportionment. Many states listed below as "Departures" or "3-Factor" have recently updated their regulations to follow the latest MTC guidance, which prioritizes the location of take-offs (weighted by aircraft value) as the most reliable measure of business activity.

What This Means for Your Record-Keeping

Even though the formulas differ by state, the underlying data requirement is the same for all of them: you need an accurate, complete record of miles flown through each state for every flight segment, for every aircraft, for the entire tax year. That record is the foundation of every apportionment schedule, regardless of whether your filing state uses revenue miles, total miles, or a receipts-based method.

• Revenue-mile states (Florida and others): You need both total miles and revenue-only miles by state. Empty legs must be flagged correctly so they can be excluded from the denominator.
• Massachusetts (airlines): Flight records provide the departure factor — MA departures, total departures, and MA departure percentage per aircraft tail. Both the property factor and payroll factor require this departure percentage, but to complete them you also need aircraft fair market values (by type) and total payroll for flight and nonflight personnel from your financial records. The sales factor requires revenue data and is determined under 830 CMR 63.38.1(9). Our software produces the departure data and computes the MA departure % so you have that input ready.
• California (air transportation companies): You need block-to-block flight time in California vs. total, and counts of California arrivals and departures vs. total — not miles. Our software tracks departure and arrival times (optional fields) and knows your origin and destination airports, so it can produce the 80/20 weighted ratio. Miles data is still useful as a proxy when time records are incomplete.
• Total-mile states (the majority): You need total miles by state. Empty legs are included, but should still be tracked so you can produce the revenue-only view for states that require it, and to maintain a complete audit record.
• Connecticut (air carriers): Flight records provide factor (i) of the CT-1120A-A three-factor formula — CT arrivals and departures vs. total A+D. All flights count (scheduled and non-scheduled), so no revenue-only filter applies to factor (i). Factors (ii) revenue tons and (iii) originating revenue must come from your operational and financial records. Our software computes factor (i) so you have that input ready.
• Minnesota (air carriers — regularly scheduled service only): Flight records provide two inputs: (1) the MN plane mile ratio (MN plane miles ÷ total plane miles, per fleet type), which drives both the property and payroll factors; and (2) the MN departure ratio (MN departures ÷ total revenue departures), which provides the 15% departure component of the receipts factor. Aircraft values by fleet type, flight payroll, and revenue by carriage category (passengers, cargo, mail) must come from financial and operational records. Most business aviation operators are not "air carriers" under the rule's definition (regularly scheduled paid service) and use the general §290.191 rules instead — confirm applicability first.
• New York (aviation services): Flight records provide factor (i) of the three-factor formula — NY arrivals and departures vs. total. Factors (ii) revenue tons and (iii) originating revenue must come from your accounting records. Our software produces the A+D data and computes factor (i) so you have one of the three inputs ready.
• Other receipts-based states (Washington, Texas): Mileage still matters for documenting where flights originated and terminated, which determines how receipts are sourced. Your flight records remain your primary evidence for these filings too.
• Departure Apportionment (universal): A generalized report that calculates the departure ratio (State Departures ÷ Total Departures) for every state in which your aircraft operated. This provides the primary input for the growing list of departure-based states like Alabama, Idaho, Indiana, and others.
• Proposed MTC departure-based model (watch list): If states begin adopting the revised MTC Reg. IV.18.(e), the primary input for the property, payroll, and receipts factors will shift to per-state departure counts weighted by aircraft value by type. AircraftTaxSoftware.com already tracks departures by airport and aircraft tail, so the flight-record inputs for this model are captured today. The missing piece for the full calculation would be aircraft cost values by type from your fixed asset records.

AircraftTaxSoftware.com automatically calculates state-by-state mileage for every flight using geodesic (great-circle) calculations and US Census boundary data. Reports include both all-flights and revenue-only mileage totals for the majority of states. For California, a dedicated report computes the 80/20 weighted air time and arrivals & departures formula required under Cal. Code Regs. Tit. 18, §25137-7. For New York, a dedicated report computes Factor (i) of the three-factor arithmetic average (the arrivals and departures factor under Tax Law §210-A(7)(b)) from your flight records, and guides you through the financial data needed for Factors (ii) and (iii). The full feature list is here.