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Personal Airplane Property Tax / Use / Sales Tax

SC

PP tax for aircraft about 1.5% of hull value per year. They troll the FAA registry and send you a return. Hint: work in Charlotte? Move to SC :D
 
Colorado tax

Last time I paid it (5 yrs ago) it was 2% of the value, one time when purchased or built, good for life of ownership. (Don't be selling and replacing those toys, guys!) I tried to talk with the state about taxes before registering, but their office was so lame about what I was to do I gave up on it. They picked up the fact that I owned the plane from FAA registry (on each of 4 previous purchases too) and send a Past Due bill for what they thought it was worth, and I argued based on actual cost. Avionics (panel) is sales tax free, but technically, I think we are supposed to pay the 2% tax, which is a stand in for state sales taxes. I never have, and I guess they have no way of knowing if I make a purchase.

I agree, a list by state would be nice for comparison, especially if someone is considering a retirement move. I suspect one day they will check FAA for sales price if I sell it and try to ding me for taxes on the appreciated value. Don't even get me started on TAXES and revenue hungry politicians.
 
Currently there's a 6% use tax on aircraft sales and aircraft parts in PA, but there's a big push right now to do away with it because we're loosing a lot of aviation business to other states with no such tax. I'm just getting started on my plane, but hopefully the tax will be gone by the time I go to register it.
 
Colorado

I am located in Colorado. I am not flying yet, so have not yet registered my plane. However, I have been paying sales and use tax to the state and city along the way... as I order and receive large component sections of the kit (wings, fuselage, prop, etc). My plan is to have the tax documents in hand if and when the tax collector comes by for a visit after I register my plane with the FAA.
 
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Thanks for the info Jason. Hopefully it will work out for you. I would think that paying taxes on the kits and other large items like engine, prop, avionics, etc would end up being cheaper than paying tax on the value of a completed and flying plane. The final value is going to be much more than the sum of the cost of the parts and small items like re-ordered parts, extra hardware, tools, duct tape, bandaids, etc could very easily be missed (by accident of course).

I'm meeting with my acountant to discuss this again but at this point I'm leaning towards not paying anything until the end.
 
Here in Oklahoma, we Okies pay $10 a year for a homebuilt & $25 for store bought. No matter how much it's value is.

Marshall

Oklahoma only pays $10 yearly for registration, but they hit you with 3.25%"excise" tax when you register the plane for the first time.
 
In Texas, if plane is purchased from an individual that does not sell more than two planes or cars per year, there is no tax. Have them sign the exclusion form.

There is no personal property tax on airplanes in Texas.

Chris Van Lauwe
RV6A N613LE
El Paso, TX
 
Oklahoma aircraft taxes

I'm looking at moving into Oklahoma along with my flying RV-7A that I've owned for nearly 3 years. Can anyone speak to the taxes and fees Oklahoma assesses on aircraft?

Thanks
 
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I am located in Colorado. I am not flying yet, so have not yet registered my plane. However, I have been paying sales and use tax to the state and city along the way... as I order and receive large component sections of the kit (wings, fuselage, prop, etc). My plan is to have the tax documents in hand if and when the tax collector comes by for a visit after I register my plane with the FAA.

I recently sent an e-mail inquiry to the Colorado Dept. of Revenue addressing this issue. Here is the reply I received from Geffrey McDaniel, Tax Examiner:

aircraft components are exempt by statute. CRS 39-26-711(b) "The sale of
tangible personal property that is to be permanently affixed or attached as
a component part of an aircraft."
Home built aircraft by definition are exempt from Colorado Sales/use tax if
the owner purchases parts or components and is the builder/manufacture of
the aircraft.
keep in mind Colorado Vendors have a responsibility to collect the tax. you
may have to pay sales tax the seller.

Sounds like it's pretty clear that there's no sales/use tax on the components we buy for our homebuilt aircraft. I'm not sure what he meant by the last part of the quote, though.
 
keep in mind Colorado Vendors have a responsibility to collect the tax. you
may have to pay sales tax the seller.




I think what he is saying is that 'in state' vendors will collect sales tax on anything you buy from them reqardless of what it is or what its attached to.

If you buy something form out of state, then you won't pay sales tax and the state won't require you to pay it directly to them.

The State of Georgia wants it ALL. So I had to pay sales tax on items I purchased from Van's in Oregon to the great state of GA.
 
Idaho state government actually has a mindset supporting aviation. Come on up and enjoy. Just don't kill yourself in the backcountry.

We pay an annual registration fee of $.01/lb of gross weight - $18 for my 7 - in lieu of property tax. The recurring cost is small, but you're going to get pinched big time at least once no matter where you live, triggered by acquisition or pulling an N number: sales (use) tax. Idaho is 5%. You can't duck it because the Feds squeal to the locals, and I'm sure that's true in every state. Use tax would be waived if you bleed sales tax upon purchase in another state. If your state has a sales tax, they expect you to pay them or the originating state. And if you don't have a sales tax, rapacious government wrings it out of you some other way (e.g., OR). Best to live based on where you want to live and not airplane tax issues.

John Siebold
Boise


yes, no sales tax in oregon, and i don't think there is a personal property tax.

but we have some high property (land & buildings) tax
 
The State of Georgia wants it ALL. So I had to pay sales tax on items I purchased from Van's in Oregon to the great state of GA.

I haven't paid use tax on my tail kit yet, which I bought new from Van's. I probably will have to at some point, though. I purchased my wing kit USED from a gent in Texas, so I should not have to pay taxes on it, right?
 
Not Quite...

I haven't paid use tax on my tail kit yet, which I bought new from Van's. I probably will have to at some point, though. I purchased my wing kit USED from a gent in Texas, so I should not have to pay taxes on it, right?
The sales/use tax is based on where the purchaser resides. To be exempt from sales/use tax in Texas, you have to fill out an "Occasional sale" form. It's not automatic.
 
I have an appointment next Tuesday with the tax assessors (I just noticed how appropriately that word begins :) ) office for my appeal. Good ol Georgia is taxing me on my parts. They found out I am building a kit when I leased a hangar at the local airport. They have assessed my emp, wings, and fuse at around $13K. If it stands I will owe about $130 this year on these subassemblies. I am arguing that the "parts" have never been part of an airworthy structure and thus don't make use of any public facilities. The definition of an aircraft used in the tax code is so vague they could start taxing frisbees, tennis balls, and on occasion, my wife's good china (just kidding). I am not expecting any joy with the assessor's office. My next step is the tax commissioner's office. If anyone has any experience with these things, I'd appreciate any suggestions.
 
The sales/use tax is based on where the purchaser resides. To be exempt from sales/use tax in Texas, you have to fill out an "Occasional sale" form. It's not automatic.

But GA does not tax the sale/purchase of used items, so I should be free and clear on my wings, correct? The original purchaser should have paid the sales tax when he purchased the kit from Van's.
 
Greetings from the People's Republic of Georgia! :)

As you can probably tell, I had my 15 minutes with the tax assessors today. No joy! Basically, they claim everything you have is taxable unless specifically excluded by law. They claim it doesn't matter if it is an aircraft or not. If it has value, they can tax it. They claim other builders are being taxed but I don't know of any personally.

It is sad to see what our nation has become. The "parts" we have sitting in our garages place absolutely no burden upon society. Yet, we have to give them our money or they will take our property (at the point of a gun, if necessary). Perhaps you recognize the underlying philosophy... "from each according to his ability, to each according to his need..."
 
So that saying that death and taxes are the only certainties in life really does apply!
icon7.gif
 
In Florida it's 6% of the value of the plane. You have to send a bill of sale with the payment. They find out you are building a plane by accessing the registration #. So when the state saw that I had a registration # they sent me a statement asking for bill of sale or purchase receipt. I sent them my airframe kit purchase receipt, since that's all I had two years ago when I started. The point here is they have not asked for engine or avionics costs. In Florida its good to get a registration # early in the process. build9a finishing.

If building in FL > 6 months, there is no sales tax.
They figure you've been paying sales tax in the build process. I did. Paint, wire, electronics and all the misc local stuff you buy.
They sent me a bill when they saw my registration. I informed them of my build time, they said "forget about it"
 
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Fla tax--

In Fla, the tax dept. gets a notice from Ok after the registration is issued. They tax on the cost of the kit only(and they know what the kits cost) They are fairly easy to deal with, even helping to compute the tax you owe on the phone, without having to mail any proof of costs. The standard kit is based on your cost, the quickbuild kit on the added cost of the kit, @ 6% sales tax, plus interest from reg date. (just paid $1770. on 7A QB). They said "we get it on the full vaue of the plane when you sell it! (ouch!). There is no yearly fee. :eek:
 
Hello jrouault

You state you are paying sales and 'user' tax in colorado. I understand that statute CRS 39-26-711(b) says you are exemple if you are the manufacturer/builder. Are you meaning to say that you are paying sales tax only. Or do I not understand the statue.

Evans
 
The sales/use tax is based on where the purchaser resides.​

Well, actually, where the asset is used. My plane was built, registered and is operating in one state (TX), and I live in another (CA). So TX wins.

That said, I can't ever bring it to CA while residing here, because they'll assume I was evading use tax... I'd give 1/2 to both, but it doesn't seem to work that way either.
 
Mississippi

What I've been able to determine is there is a yearly registration tax ($25 I think) and a sticker that is placed on the side of your plane.

I do know that the state tax on an airplane is 3% instead of the regular sales tax (7% our county). Trick is to get them to tax it as an airplane instead of a kit. I gathered up my Van's invoices for the all the kits and went down to the courthouse and paid my 3% on all the kits at once. I also took my reserved N number with me. My EAA counseler recommended this to since the tax office just seems to find out you have an airplane once you get a N number or airworthy certificate. Much easier to hand them a sales/use tax receipt should the tax man calleth.

I guess I'll make an annonymous call to the tax assessor's office and ask what taxes are on airplanes in this state just in case I missed something.

Not that I want to pay it but in the long run, it's probably cheaper.
 
Tennessee RVers how much tax do you pay?

I looked thru this thread and didn't see any posts from Tn. Entries would be appreciated.

Thanks in advance!
Stan
 
I have an appointment next Tuesday with the tax assessors (I just noticed how appropriately that word begins :) ) office for my appeal. Good ol Georgia is taxing me on my parts. They found out I am building a kit when I leased a hangar at the local airport. They have assessed my emp, wings, and fuse at around $13K. If it stands I will owe about $130 this year on these subassemblies. I am arguing that the "parts" have never been part of an airworthy structure and thus don't make use of any public facilities. The definition of an aircraft used in the tax code is so vague they could start taxing frisbees, tennis balls, and on occasion, my wife's good china (just kidding). I am not expecting any joy with the assessor's office. My next step is the tax commissioner's office. If anyone has any experience with these things, I'd appreciate any suggestions.

Maybe you should write off any parts you mess up during the build and let this madness run full circle. :cool:
 
I looked thru this thread and didn't see any posts from Tn. Entries would be appreciated.

Thanks in advance!
Stan

They get us in TN with the use tax. It depends on how much you claim as to what you pay. Some I know have only claimed the full airframe kit cost and others have only claimed the cost of the tail, wing and fuse kit (less finish kit). If you register it in TN, they will send you a notice after about 3 months if they cannot find any tax being paid on it.
 
TN Tax (or lack thereof)

They get us in TN with the use tax. It depends on how much you claim as to what you pay. Some I know have only claimed the full airframe kit cost and others have only claimed the cost of the tail, wing and fuse kit (less finish kit). If you register it in TN, they will send you a notice after about 3 months if they cannot find any tax being paid on it.

Thanks for the reply Brantel. So it sounds like 'use tax' is a one time thing and there is no re-ocurring annual tax. Happen to know if this is county or state specific? If this is the case it makes TN sound very appealing w/no state income tax (and the ability to write off in-state paid sales tax.)

Stan
 
Aircraft Taxes in AL

Hello all from Alabama. After reading all of the post it I feel like moving to some of the other states just so I can afford my RV when its done. In Alabama, by what I am told, we have to pay a sales tax on the value of the aircraft and it is recommended we have reciepts. We are also have a use tax due every year which is the same as certified aircraft. I just sold my 78 Arrow valued at $82,000 and the tax bill was $918 / year. So I am expecting to pay somewhere aound $2000 for sales tax and another $1000 per year just for flying an airplane I built. Let me know if anyone figures a legal way around this. :)
 
Taxes

Hello all from Alabama. After reading all of the post it I feel like moving to some of the other states just so I can afford my RV when its done. In Alabama, by what I am told, we have to pay a sales tax on the value of the aircraft and it is recommended we have reciepts. We are also have a use tax due every year which is the same as certified aircraft. I just sold my 78 Arrow valued at $82,000 and the tax bill was $918 / year. So I am expecting to pay somewhere aound $2000 for sales tax and another $1000 per year just for flying an airplane I built. Let me know if anyone figures a legal way around this. :)

Aren't we supposed to "Spread The Wealth"?????????

I agree with Thomas Jefferson who said "Governments should be overthrown every 20 years or so." Don't believe me? ------------Google it.
 
Aren't we supposed to "Spread The Wealth"?????????

I agree with Thomas Jefferson who said "Governments should be overthrown every 20 years or so." Don't believe me? ------------Google it.


.....not just "should be", but a "duty" when no longer serving the people...........
 
How far back can a state go asking a person for sales tax receipts on an aircraft built from parts? I believe I started mine in 2001, and finally registered it with the FAA in 2013.

As we all know, it can take some of us 10+ years to complete an experimental homebuilt.
 
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I had a Long-EZ in CA in the 90s. From what I remember the Personnel Property Tax on airplanes was 1% of the value. After I registered the plane they sent me a card and there was a box for "value". I put down $10,000 and they never questioned it.
I can also tell you they will track you down.
I had moved to NV and when I sold my plane I had it parked at a friends airport in CA so he could show it to buyers. CA sent me a tax bill. I was only parked there 2 months. My friend knew the airport manager and he said they send in the N numbers of any plane that has a monthly parking spot. I had to prove to them that I was not a resident of CA and the plane was only parked there 2 months.

Another thing I heard was that the Taxman has a list of average value of well known airplane types. So if you try to claim your RV10 is only worth $10,000, they will reassess you to the average. (also if you leave the value box blank, they will assign a value). However since you have an experimental airplane you can call it whatever model name you want when you register it, instead of calling it an RV. If you call it a John Doe Special, they have no idea what it is or what it is really worth. Of coarse, then you might have a hard time convincing the insurance company it is really an RV and you rate will be higher.
 
Indiana sales/use tax

Maybe I missed it somewhere on this thread, but what have others done about initially registering their new planes with the state?

Now that I have officially registered my plane with the FAA, I'm sure I'll need to register with my state (IN). That means paying sales tax.

For some reason, I can't seem to find any of the receipts for major stuff -- you know, like kits, engine and avionics. I have TONS of receipts for other little stuff, but nothing big.

Van's sent me their Bill of Sale -- the FAA form, and the price was left blank.

What have others done? Should I just estimate what I have in it? Make up a believeable number to put in the blank on the FAA Bill of Sale? Scrounge copies of receipts from the big vendors of the major components?

Really not sure how to do this ...
 
Best State...

Could someone please suggest the best state in the southeast to own and operate an aircraft in? I'm referring to both the yearly cost and the up front cost tax wise.
Best
Brian Wallis
 
I do now!

Anyone have experience of Vermont tax?

Received notice from Tax Office in same mail that delivered my registration certificate from the FAA. Called tax office and explained that I built and did not buy the aircraft and therefore didn't have a traditional bill of sale. Mailed of copies of major item receipts as requested and a couple of days later received a tax bill. Much to my dismay almost one third of it - or plus 50% - was interest and penalties. I had hoped that the clock would start ticking on the Sales and Use tax when the thing was actually useable. However they did forgive anything older than 7 years.

I can now add tax planning to the education part of "recreation and education".
 
Could someone please suggest the best state in the southeast to own and operate an aircraft in? I'm referring to both the yearly cost and the up front cost tax wise.
Best
Brian Wallis

Tennessee is good, if you already own the plane.

The sales tax bite of 9.25% is rather stiff, if you're a resident of the state when purchasing the plane.

Annual tax costs add up to "0". There is no state, county or municipality aircraft registration. There is no county property tax.

Hope this helps.

Mike
 
the tax man cometh

Received notice from Tax Office in same mail that delivered my registration certificate from the FAA. Called tax office and explained that I built and did not buy the aircraft and therefore didn't have a traditional bill of sale. Mailed of copies of major item receipts as requested and a couple of days later received a tax bill. Much to my dismay almost one third of it - or plus 50% - was interest and penalties.
State of Missouri is out to try and get some revenue. Every one that registered a plane in MO in the last 6 years got a use tax bill this past month. Most have interest and penalties that exceeds our original bill.
Be careful out there, states are looking for cash and what better place to look then those wealthy aircraft owners who are such a minority that they will never get any public sympothy. Also it is easy to get records as airplane ownership is public records and anyone can look them up. Why is that? It should be no easier for someone to know what aircraft I own then for someone to know what cars or land I own.
 
Is it ownership records or registration records that are public knowledge? could you form an llc or corp to "own" the plane and put the registration in that company? certain states are pretty protective of corporations.
 
I've often wondered about this. What about forming a corporation in one of the states that is very corporation-friendly (I think Delaware comes to mind, maybe Nevada as well) and have that corporation own the plane. What would be the effect if, let's say, a Delaware corporation owned the aircraft but it was based in another state (like, say, California)?
 
Sorry, but no.

I've often wondered about this. What about forming a corporation in one of the states that is very corporation-friendly (I think Delaware comes to mind, maybe Nevada as well) and have that corporation own the plane. What would be the effect if, let's say, a Delaware corporation owned the aircraft but it was based in another state (like, say, California)?

It is all about where the airplane is based, not registered or the "owner's" location.

Some California law:

Section 5301 of the California Revenue and Taxation Code requires the annual assessment of non-commercial aircraft to the owners as of January 1 of each year.
Aircraft of historical significance may be eligible for exemption, if certain criteria are met. For more information, call the Aircraft Division at (559) 488-3545.

Determining the Situs* of the Aircraft

*(Latin for position or site) of property is where the property is treated as being located for legal purposes.

Non-commercial aircraft has situs for taxation purposes at the airport in which they are habitually situated when not in flight. (Property Tax Rule 205(b); Revenue and Taxation Code 5362)
The Assessor also relies on, but is not limited to, F.A.A. registration information in determining the taxable situs of the aircraft.

The purpose of the Aircraft Property Statement is to provide the Assessor with information regarding the aircraft that will aid in the determination of fair market value for the current year. This form is a legal affidavit for which the information provided is declared to be true under penalty of perjury.

Aircraft Property Statements are mailed to identified aircraft owners on March 1 for ownership as of January 1 and are required to be returned by April 1. The form must be completed in its entirety, with as much detail as possible regarding the current condition of the aircraft. Instructions and other general information are contained on the back of the form. Failure to file an Aircraft Property Statement will compel the Assessor to estimate the market value of the aircraft and apply a penalty assessment (Revenue and Taxation Code Sections 501 and 5367).

John Clark
RV8 N18U "Sunshine"
KSBA
 
Taxes???

How have you folks handled the inevitable taxation issue after applying for registration? How have you estimated value? Did you use the cost of materials? The cost of just the kit?

Thanks,

ken
 
taxes

I am paying a portion of the state use taxes as I go. That way when the plane is finished, all taxes will have been paid, rather than one large painful payment at the end, when they catch you. I paid some in 08, will give them a nice check for 09 and finish with 10. Just keep your records to show you have paid the taxes.

Allan Stern
RV 8A N348AS reserved, "Toozicoot" 95% done
Lycoming 0-360 Hartzell CS GRT HX
RV 6A 570 RV "My Girl" 90 hours
0-320, Hartzell CS
 
California Tax Assosors Office

As an Airport Manager, I will tell you every year the assessor?s office will ask us to provide a list of every tenant and associated aircraft tail number we have located on the field.

They then send each tenant a tax bill for that aircraft. I always know when because they always call complaining to me. Sometimes the person on the hangar lease is not the same one who owns the airplane, but they still get a bill.

Got to love California
 
Andy,

As I would interpret the article it would be after the airplane is built and you are reparing or maintaining it. So if you had to buy a new engine for the plane it would be exempt from taxes. As I understand Ohio tax law, we are subject to use tax on ANYTHING you buy out of state and use in state. I am looking at the materials used in the construction of said kit. And to me materials are the big ticket items not a few nuts and bolts, but they do all add up.
 
You almost gotta be a lawyer here...even in Texas

i quote the Sales and Use Tax Bulletin dated Feb 08 from Texas Comptroller of Public Accounts: "Aircraft and the Texas Sales and Use Tax."

"Exemptions.
No sales and use tax is due if the aircraft is purchased, leased, or rented by a:...
-Flight school or flight instructor.
The FAA recognized school or certified instructor must use the aircraft exclusively for FAA-approved flight instruction." END QUOTE.

i am not sure whether this means the exemption applies to instruction of the flight instructor and owner who uses the aircraft to GIVE instruction - or only to a student who purchases the aircraft to RECEIVE instruction. in my case it won't matter, because when the plane is completed and comes to texas(from my my partner in another state) i am the CFI and my wife is the student, and we both own the aircraft. but i am not sure that if i were NOT instructing my wife (and i really AM, yes, i know it sounds very derring-do) that the tax folks in texas would allow the exemption for my OWN instruction toward say an ATP, as an earlier post suggested. in short, the exemption says the CFI must use the aircraft exclusively for FAA-approved flight instruction; it doesn't say whether that must be for his students or for his own instruction. i don't know the answer, but before assuming the exemption applies to either instructor-owners or student-owners or both i'd check with a tax attorney. the states are hurting and the folks in tax offices are hired to collect taxes, not make liberal interpretations of exemptions for benefit of the populace, unless the populace can prove they qualify. we should probably expect no exemption we cannot prove.

Further and perhaps less-ambiguous exemption qualification might apply under the Occasional Sale paragraph. will research that one and post any possible useful info later.
 
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