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Personal Airplane Property Tax / Use / Sales Tax

Florida tax

From all the research I've done FL only wants sales tax. No annual property taxes on vehicular items. If I'm mistaken please someone infom me before I reserve a N-number
 
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Massachusetts tax

Here in Massachusetts, there is no sales tax on aviation-related parts, etc. (including whole airplanes) and there is no annual personal property tax on airplanes either (there is an annual registration fee of about $125). Thus if you want tax free treatment, come register in Massachusetts!

(Sort of ironic... we tax everything else!)

Peter Schwarzenabch
RV-7 Fuselage
 
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Tax

Does anyone have tax data, for registering/owning a Van's RV, in:
New Mexico
Tenneessee
Alabama
Arkansas
Missouri

Thanks!
RC Lewis Jr
RV8
Wiring
 
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Slight thread hijack

flyerfly said:
And now my vent... Taxes in general? Pay for what you use and the services you want...no more...END of venting session. :mad:


Flyerfly's comment initially make perfect sense until you get to the ATC user fee discussion. Do you really want to pay the same as an AA 767 for ATC access? :eek: I think not, unless the user fee is prorated on the "souls on board" concept. :confused:

This thread is returned to the original subject matter.
 
Research will pay

When I was considering moving to the Carolinas I went browsing through the tax sites to see what people are paying for their aircraft in tax. It varies widely. One thing I noticed is many of the experimentals were not listed necessarily as an RV but for instance a "Stewart 7A" and then showed assessed values far below the actual value of any 7A other than an empennage kit. So that is another thought. You would be amazed at the number of 182's and 210's you see on the list of taxes that are worth next to nothing - like under 20k!! :eek:

This is a homebuilt aircraft - no one knows whether it is worth the cumulative value of the parts other than you. ;)

Another thought too, if you try to avoid tax by where you register it, some airports are required to report what aircraft are operating out of it. I would guess that would mean if it came up that you are a resident and are regularly operating out of a local airport, you could be nailed. I had a plane when I lived in ND, but because it was kept in MN across the border, I wasn't taxed in ND and was not a resident of MN so they left me alone too. Maybe that would work in Charlotte? The SC border isn't far off depending on where you live.
 
North Carolina tax

Stewart,

You are correct. NC aircraft property taxes are set on the airport for which the airplane is based, not the address of the owner. Like you mentioned, airports are required to report what planes are based there in NC. I don't know about SC but expect it is the same.

As for the "Stewart 7A" listing, that is because Stewart is the manufacture of the airplane, not Vansaircraft, Inc. Thus you can name it a "Stewart Swiftarrow 01B" if you want. Van's once told me they only sell aluminum. They can't control what the purchaser of said aluminum does with it. A bit of a legal copout but understandable.
 
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Michigan Tax

Frank,
I called the taxing authority and asked how detailed they wanted me to get with the receipts. The women I spoke to made it VERY clear she didn't want any receipts, just the value of the plane. It's up to the builder to set the value. She cautioned me about setting the value too low or they would send "someone" out to have a look. This is my second experimental without sending in any receipts.

I would call the number on the tax form and get the straight scope before sending in any receipts.

Gary
 
Sales Tax

Jekyll said:
That was me in another thread (maybe on another site :eek:)

That was for sales tax, not personal property tax. I took a loan and NAFCO had me sign a FAA registration form which they then mailed in. About 6 weeks later, I got a letter from the state saying the FAA notified them of a new aircraft registration and that they demanded a 6% sales tax. I sent in the papers and tax for the amount I had in the kit at the time and they were happy. I won't be registering it later after all the parts are installed.

My kit is still under construction but it is registered. I no longer need to keep renewing my N number reservation. I have my AC Form 8050-3 Certificate of Aircraft Registration in my hand. Now if they had just sent the Airworthiness Certificate along with it.....

Jekyll

My kit is also still under construction and I don't have an engine yet. I'd like to register now like you did but they want an engine serial number on the registration form. If you don't already have an engine, I'm curious how you got around that? If you do have an engine, disregard.

Thanks,

Bill
 
This isn't a direct answer and could be incorrect, but I don't think so...

If you're using a non-certified engine (e.g., Lyclone, conversion, etc...) then you can put whatever make/model/serial number on your engine you want to. For example, I'm planning on a Lyclone, so I'll just put 'Redmond O-320 Serial Number 0001' or something similar, even though the engine doesn't exist yet. If you're worried about the revenue people showing up, take the name and serial number off your lawnmower and use that :D
 
use tax in arizona

Does anyone have recent experience with registering their RV in AZ? Specificly with the AZ DOR and use tax. I searched past threads and didn't find any specifics. Please Email off list or call me if you can.

Bill
480-231-1034
[email protected]

From Rosie: Found this on the AZ RV list:

I did it about a year ago. Basically as soon as you get an airworthiness &
register for an AZ license you get tagged for tax. Send in a few Bill of
Sales from Van's...say $20K or so, and tell that you owe tax on that amount.
Send a check with your letter for the estimated amount and ask them to
figure the actual tax. If the DOR try to make the tax retroactive tell them
there was no way you could have determined the value until you were
complete, therefore you didn't pay the tax. If you are polite but firm they
will agree and take your money. Worked for me.

Also - hang on to all of your correspondence. I had the DOR come back after
I paid the tax and say that I owed the penalties. I sent in copies of the
tax checks and they let it go. Basically they are clueless at the Dept. of
Revenue and can't keep their own info straight. Now you know what your tax
dollars are doing...

Kelly RV-6A
 
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Texas Sale Tax / Use Tax ??

I've been thinking about registering my plane early, while the value is still relatively low, to minimize potential taxes. There have been some long threads on Sales, Use and Property tax questions that I have reviewed.

One of the posts suggested that there is an exemption from the Texas Sales/Use tax, but when I checked the Texas tax page : http://www.window.state.tx.us/taxinfo/taxpubs/tx94_168.html , it looks to me like Sales/Use tax may apply. Can anyone provide additional information on Texas aircraft taxes?
 
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I run a high-pressure air systems business, by no means an expert in this, but I know that I can avoid paying sales tax for any item I buy with the intent to resell or repackage and resell (i.e. - that item is to become a component in another item for resale). Any item that I purchase for company use as a tool or expendable item (not for resale) must have tax paid on it.

I buy large quantities of parts tax-free and assemble those parts into working machines, then sell those machines. I also buy pumps, compressors etc for my own shop use that I have to pay sales tax on, but I do get to write those off as business expenses for Uncle Sam. I've been tempted a few times to label EVERY item I buy as "for resale" in the inventory log, but I'm just plain chicken of an audit, and I've got too much to lose at this point. I make a decent dollar as it is, I'm not going to risk my business.
 
Unless you're in the business of buying/selling aircraft or related stuff I think you should be exempted under the "occasional sale" exception. JMHO.

"The purchase of an aircraft may also be exempt if it is purchased from a non-permitted seller who makes an occasional sale. An "occasional sale" is one made by a person who does not habitually engage in the business of selling taxable items and who sells no more than two taxable items during a twelve-month period. To document the exemption, a purchaser should ask the seller to provide a signed statement that the transaction qualifies for the occasional sale exemption as defined in Texas Administrative Code Rule 3.316 (b). The purchaser must retain the statement in their records for four years following the date of the purchase."
 
Occasional Sale - isn't Vans the seller?

Wouldn't Van's be the seller? Since they make more than an occasional sale, I did not think that this exemption would apply.
 
I assumed from Rick's question that he was thinking ahead to a time when he might sell his plane.
Rick - is that correct??
 
Initial registration for me, not selling

John, I'm asking regarding initial registration - not selling in the future. It will probably be the end of '07 before the plane is ready for it's first flight. I was thinking about registering it now, because there is the chance that I will move to Florida in '08 and I would be liable for Florida sales tax if I own the plane for less than 6 months - which will likely be tied to the registration date.
 
While we're on the subject - planes used in business in Texas are also subject to business property tax - and are required to be "rendered" each year for valuation.
In Dallas County the appraisal district folks have physically visited local airports to identify aircraft and then sent rendition forms to the owners.
I would suggest if you get such a form that you do not ignore it - and if your plane is strictly for personal fun and has no business use then I'd suggest that you clearly mark on the form that the plane is not used in business and send it back to the tax folks
(be sure and keep a copy for your records!)
(ps - nothing I've said on this thread is legal advice - just plain old common sense)
 
Rick_A said:
John, I'm asking regarding initial registration - not selling in the future. It will probably be the end of '07 before the plane is ready for it's first flight. I was thinking about registering it now, because there is the chance that I will move to Florida in '08 and I would be liable for Florida sales tax if I own the plane for less than 6 months - which will likely be tied to the registration date.


I don't know the answer to that issue - EAA or AOPA may have an answer - all I can say is Why??? would anyone want to leave Texas!! <g>
 
Exemptions
No sales and use tax is due if the aircraft is purchased, leased, or rented by a flight school, flight instructor, or student. The school, instructor, or student must use the aircraft exclusively for FAA-approved flight instruction.


Until I get my ATP, every hour I spend in the plane will be logged as time toward that license, so I'll be good for 1500 hours (at least) tax-free. After that I'll figure something out.
 
CA Use / Sales Tax?

Like many of you I am building an RV-8. I have been looking for a little 120/140 to keep my flying skills up while I build. I put a deposit on a nice 140 yesterday and now need to figure out in what state to register it. The state of CA wants 7.25% tax on the sale. My dad lives in Texas and will be on the insurance of the plane and will keep it there for use a few weeks. If you live in Texas or California, can tell me about your experience with buying and aircraft. Thanks.
 
I am not sure about what can be done with the sales tax, but Calif does have a program which will let you exempt the aircraft from property tax---------beacuse it is over 35 years old (at least I dont think any 140s have been built since 1972) you can have it on public display 12 times a year, and not have to pay property tax.

Mike
 
TEXAS might win in this case....

AX-O said:
Like many of you I am building an RV-8. The state of CA wants 7.25% tax on the sale. My dad lives in Texas and will be on the insurance of the plane and will keep it there for use a few weeks. If you live in Texas or California, can tell me about your experience with buying and aircraft. Thanks.

The address that you gave to the FAA is where the tax issue will flow to. If the address on the FAA reg is in Texas, then you will not pay SALES TAX to California. After one year, you can base it in California and you will be exempt from sales tax. But you will pay a 1% property tax PER YEAR.

But look at the big issue...... Think about where you will address the "8" when you are ready!! You should do that in Texas to start with. Then change the address to California after a year. Depending on the year that you finish the ATE :p , the SB of E may be back to 90 day "test period" and then you could bring it in after 90 days instead of one year. You will still need to pay the 1% tax each year, but California is one of
THE BEST STATES TO FLY IN. :eek:
 
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CA Sales Tax?

OK, a nasty subject...but since we're coming up on the end of the year, and it will soon be time to visit my accountant, and since I've now purchased the empennage and wings...

what are peoples' thoughts on sales tax (especially in California)? How did/do you deal with this issue?

I don't want to get nailed after completion with a big ol' tax bill and penalties...
 
I also paid as I went. I made sure I put my builder's number and if you have reserved an N number put that on the form also. I also noted what kit of the sequence I was paying the tax for. Such as kit 2 of 4. I've just recently started flying and have already been contacted by the county tax collection folks but not a word about the sales (use) tax, so I think I'm good with them.
 
I called the state BOE regarding this very issue and I was told I have two choices. Pay as you go, or wait until the end.

They said if chose the pay as I go method to make sure to keep excellent records (copies) as it possible for them to misapply a payment to another account (or not link it to your n-number) and that in the end I might need to prove that payments have already been made.

I asked if I waited would I get hit with penalties, and I was told no, but keep in mind this is the state we are talking about and anything can change. If you choose this method it will likely take a while for them to catch up to you with a request for information (sometimes 12-24 months). It took them almost two years to bill me the sales tax on my last aircraft purchase.

In either case, you will pay a use tax to the state only on the purchase price of any parts you purchased out of state, or from out of state vendors, where CA sales tax wasn't already collected.

Your county will also levy a personal property tax annually, but that will be on the fair market value of the completed airplane once flying and registered.
 
Several years ago I bought an airplane from a broker in California. I picked the airplane up in SNA and flew it non-stop home to Arizona. About three years later we visited California and overnighted at Hawthorne airport. As a good airport patron, I filled out the envelope with my tie down fees and put it in the box. About a year after that I got a bill at my home in Arizona from the California State Tax commission for several thousand dollars in back taxes, fees, and penalties. I called them and they said that an audit had shown that the airplane was based in California and that the Arizona address was a ruse to avoid taxes. They said it happened all the time. They wouldn't tell me, but I can only assume that the two nights we spent at Hawthorne were what triggered their goons. It took me about three months to finally clear the issue. It took three years of continuous tie down receipts in Arizona, a letter from the Arizona department of Aviation showing that I had paid all my Arizona fees (approx $100 a year), and even a receipt for gas in Arizona dated the same day I took delivery that showed that I flew non-stop based upon fuel consumption. (That took me two hours in a storage shed with an FBO employee going through their old receipts).
When they finally released me of the obligation, they told me that if I had landed anywhere in California after taking delivery of the aircraft I would have still been responsible for the taxes.
About two years later I got a letter from a Collection agency hired by the State of California for the exact same taxes plus even more fees. I had to certify mail them a notarized copy of the release I received previously. What a nightmare.

A few years ago California also tried to tax California income tax on airline pilots who flew legs that originated and terminated in California like they charge professional athletes who play games in California. Fortunately, that idea died. You California brethren need a good harbor tea party.
 
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Tax Issues

Nah, woxofswa, they just had you flagged as a "rich airline pilot" :)

Seriously, I have some experience with the California Tax system. The thing that started your issue was the fact that you picked up the airplane in California. Silly as it sounds, the rule is that if the seller delivered the airplane to you out of state there wouldn't have been a problem. Now for the real twist, if I, as a resident of California, bought an airplane in or out of state, I can legally avoid the tax by keeping the airplane out of California for a certain length of time. Go figure!

John Clark
RV8 N18U "Sunshine"
KSBA
 
I called the state BOE regarding this very issue and I was told I have two choices. Pay as you go, or wait until the end.

They said if chose the pay as I go method to make sure to keep excellent records (copies) as it possible for them to misapply a payment to another account (or not link it to your n-number) and that in the end I might need to prove that payments have already been made.

I am so sick of this kind of BS from various places, especially government agencies...it's "possible" they could misapply a payment to another account? What the...? How can anyone or any organization responsible for other peoples' money be so damned irresponsible? Seems pretty easy to keep payments by one taxpayer for his own taxes straight...that *is* what SSNs or TIDs are for, right?

Criminy...

I asked if I waited would I get hit with penalties, and I was told no, but keep in mind this is the state we are talking about and anything can change. If you choose this method it will likely take a while for them to catch up to you with a request for information (sometimes 12-24 months). It took them almost two years to bill me the sales tax on my last aircraft purchase.

In either case, you will pay a use tax to the state only on the purchase price of any parts you purchased out of state, or from out of state vendors, where CA sales tax wasn't already collected.

Your county will also levy a personal property tax annually, but that will be on the fair market value of the completed airplane once flying and registered.

Thanks for the info...I think I'll be going with the "pay as you go" approach to keep from getting socked with a final BIG tax bill. I assume my tax guy will know which forms/etc. to use...

I don't mind so much (okay, well, I do) paying sales tax. But the personal property/luxury tax thing chaps my hide a bit...
 
I am so sick of this kind of BS from various places, especially government agencies...it's "possible" they could misapply a payment to another account? What the...?
Let me clarify... the reason that it might be misapplied (I probably should have said NOT applied) is that technically you don't have a valid n-number until the plane is officially registered -- reserved n-numbers don't count. The state gets records from the Feds only for registered aircraft, not reserved n-numbers. In fact, I might hesitate to give them one (an n-number) until it is registered... instead give them a serial number you make up. What can happen is they may not automatically apply all prior payments to your file once you do register the aircraft, because they can't assign or track payments to a reserved n-number. The records you keep are needed in case you have to show proof that payments have already been made. Again, give it a serial number and make sure all payments are made against the same number. But please, if you have any doubts or questions don't take my word for it, call the BOE aircraft registration division, they have always been helpful to me. My advice is only as good as how much you paid for it... $0. :)

I don't mind so much (okay, well, I do) paying sales tax. But the personal property/luxury tax thing chaps my hide a bit...
Me too. Just like your car or your house, you have the privilege of paying it annually. The good news is that is typically is only 1+%, rather than the 8.75% one time use tax I will pay (for my county). :(
 
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California Use and Sales Tax form

Hi-

Sometimes I hate California, but hey, I only live four miles from the ocean...

Anyway, to pay the taxes you can either wait till the N number is assigned at the end, or pay as you go.

The pay as you go form is located at;

http://www.boe.ca.gov/pdf/pub79b.pdf

This form is used for sales and use taxes. Keep records, as mentioned above. You will have to provide proof of each payment when the N number get submitted.
 
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It's only 1%??

Me too. Just like your car or your house, you have the privilege of paying it annually. The good news is that is typically is only 1+%, rather than the 8.75% one time use tax I will pay (for my county). :(
LET'S SEE WHAT 1% LOOKS LIKE........

Low end used RV $60,000.00........ tax $600.00 = 21 hours of fuel.
High end RV $100,000.00........ tax $1000.00 =36 hours of fuel.
RV 10 $200,000.00......... tax $2000.00 =42 hours of fuel.

And this will apply even if you never fly the aircraft.:eek:
 
Pay yourself as you go

I called the state BOE regarding this very issue and I was told I have two choices. Pay as you go, or wait until the end.

They said if chose the pay as I go method to make sure to keep excellent records (copies) as it possible for them to misapply a payment to another account (or not link it to your n-number) and that in the end I might need to prove that payments have already been made.

There's no way that I am going to send money to the government if there is a chance that they may or may not remember that I paid them. This is just insane. For those of you who want to pay as you go in order to avoid having to dig into your pockets later for a big chunk of tax money, try this. First, open an extra savings account at your bank for the use taxes. Every time you buy something that gets attached to the airplane, save the receipt and make a deposit to that account for the taxes.

When the state comes looking for their money, you will have it to give, and you should be able to verify that the amount is correct for the purchases made. As long as you don't think of that money as your "savings", you will not feel the pain as much as if you had to take it out of your checking account or your real savings account. Also, it may not be much, but you get to collect interest on the money as you build. If you never finish the airplane, then rename that account from "RV taxes" to "Money saved", and be happy that you did not feed the blood suckers.

This is how I plan on paying for my avionics. Every once in awhile, I put another $500-$1000 in the account. Once it is there, it is out of mind. When the time comes, $10,000 for avionics will not be that big a deal.

Cheers,
Tracy.
 
LET'S SEE WHAT 1% LOOKS LIKE........

Low end used RV $60,000.00........ tax $600.00 = 21 hours of fuel.
High end RV $100,000.00........ tax $1000.00 =36 hours of fuel.
RV 10 $200,000.00......... tax $2000.00 =42 hours of fuel.

And this will apply even if you never fly the aircraft.:eek:
Depressing isn't it. Here, the city is even nice enough to hand over the property tax bill for the hangar if you are renting a hangar.

The other important thing to note is that personal property taxes on aircraft are often levied against the owner of the airplane on Jan 1 of the year. This means that if you sell the airplane on Jan 2, you are still on the hook for the entire years worth of taxes (no proration). You have to keep that in mind when pricing and negotiating the sale of your aircraft. It may be different in each county, but that's that way it works here.
 
LET'S SEE WHAT 1% LOOKS LIKE........

Low end used RV $60,000.00........ tax $600.00 = 21 hours of fuel.
High end RV $100,000.00........ tax $1000.00 =36 hours of fuel.
RV 10 $200,000.00......... tax $2000.00 =42 hours of fuel.

And this will apply even if you never fly the aircraft.:eek:

Well... Kinda. The rate on my RV8 in Santa Barbara county is actually 1.02935 because of a couple of school bonds that are included in the calculation. A couple of points; the assessed value goes down with time as the airplane depreciates. You do, however, get to fill out a form every year stating any major changes like an engine overhaul or additional avionics. The lad that runs the program for the County understands airplanes. I have talked to a couple of people that have tried to hustle him with no success. And no, I don't like to pay taxes but it is just another cost of doing business. My hangar rent is 8 times the property tax bill. In the words of a bright friend of mine, "Ya gotta pay to play."


John Clark
RV8 N18U "Sunshine"
KSBA
 
Pay to play...

Yup! it costs more. But some of us are willing to pay because we like the place.

John Clark
RV8 N18U "Sunshine"
KSBA
 
Sure, the cost of admission stinks, but...
Fantastic weather, no humidity, no bugs, amazing georgraphic diversity, a fantastic local airport with tons of homebuilts and warbirds, wineries within walking distance of the house... I love this place!!! It's (some of) the people I could do without. ;) :D
 
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Colorado Use Tax?

Does anyone with a flying RV in Colorado know what the use tax situation is? They are very clear about collecting tax on aircraft purchased outside of Colorado and stored or used here. However, there is no mention of homebuilts and there seems to be a specific use tax exemption for "component parts" and another exemption for "aircraft parts used in general maintenance."

I'm not sure if these exemptions apply or even if they can be used by individuals. My accountant does not seem to know a whole lot about airplanes.

I don't want to owe a lump sum soon after registering my airplane... If I'm required to pay any sort of tax, I 'd like to know about it way ahead of time.

Any input would be appreciated.
 
Thanks Deven. And thanks to whoever moved my other post to this thread. I didn't see this one when I was searching.

I have to believe that someone here built and registered and RV in colorado. Did you pay tax?

I've talked with 2 local rv6 builders who didn't pay anything (one was flying since 2004 and the other is a few years older than that). However, these guys sort of indicated that they thought the tax man could show up at any minute.

I'm just looking for a few more data points.
 
Illinois Use Tax

Someone else might have already posted this info for Illinois, but I did not want to go through all the postings to find out.

In Illinois you have to pay a 6.25% Aircraft Use Tax plus $10/year registration fee. I think a/c used for hire or commercial uses are exempt. You have 30 days to file or you get hit with a late filing fee, along with late payment penalty, plus interest!

You have to submit a copy of the sales agreement and FAA Bill of Sale, and the tax is based on Fair Market Value, not necessarily sales price.

On the registration form, it says that an Illinois A/C owner who bases out-of-state but air navigates within Illinois must register, but the Use Tax form does not say if the same person would have to pay the Use tax. I suspect if you register they will come after you for Use tax. In fact, the registration form has a space to enter the Use Tax Transaction Return Number, which is basically the serial number of the form. The form is only available by mail, not downloadable through the web.
 
WA use tax

For states that have use tax (I'm in WA), are you paying tax on the parts you
purchase or just the finished product (Completed plane)? I'd hate to pay taxes
twice on that rib/skin/gizmo that I screwed up and had to reorder. Are you
paying-tax-as-you-go on the kits? Also, what does the Bill Of Sale from Van's
say? Does it have a number attached to it (and is it just the kit or everything
you purchased from them)? (Sorry if I'm asking a stupid
question, but I was dinged by the tax revenue service in WA when I bought
my '77 Beech Sierra for nearly 8k because I didn't pay at the time of
purchase... They caught up with me 2+ yrs later and wanted it all and more (late fees))
 
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