Buying a rocket! (looking for a bit of tax advise)

[Austintatious]

Hey everyone, I am excited to be joining the club soon as I am in talks to purchase a rocket! (very excited)

There have been a million questions...LLC or no? who does the pre buy?  ECT... and I have been trying to educate myself as much as possible.  Lots of good and bad advice and .02 to be found on every topic.

What I am trying to figure out is how to (legally) avoid sales taxes.  We are in Texas and the aircraft is in another state.   Texas has an exemption from use tax for "occasional sales made outside the state" on taxable items.  I have read that SC has a max tax for aircraft sales of 300 or 500 dollars.

So my question is.... is it as simple as the buyers and seller meeting in SC to close and getting an affidavit stating the seller is NOT a retailer and is making an occasional sale?   If I understand everything correctly, SC would take their 300-500 dollars and Texas would exempt me from the use tax.

Does anyone  have any advice on this matter?

 

Thank you so much for any advice.  I have been stalking these forums for some time in my research.

Austin

 

[BradB]

Hello Austin.  

Welcome to the club (I don’t think that I’ve been kicked out yet).

You’ll get lots of opinions. You might want to consider professional advice.  https://www.advocatetax.com/  is who I have used and been happy with the advice and assistance that they have provided.   There are probably many other similar services.

Good luck with the Rocket - lots of fun ahead for you.

 

Bradb

Former Acclaim.

Now Meridian N951TB

 

 

[KSMooniac]

Are you buying from an individual or a dealer/FBO?

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[Austintatious]

From an individual.

[KSMooniac]

Then you shouldn't have any tax liability as a casual sale between individuals. You can probably find the verbiage on line, or talk with a TX lawyer.

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[Austintatious]

thanks... indeed I have done some more reading and casual (more specifically Occasional sales) are exempt form both sales and use tax in Texas.

[carusoam]

AOPA might be a good resource to get up to speed with ownership and legal issues... they have some free stuff for members...

Best regards,

-a-

[FloridaMan]

I put mine in its own LLC as I understand will help isolate you from personal liability if someone else crashes it. Talk to @Parker_Woodruff about insurance if you have any questions in that area. 

[peevee]

Is the plane in SC? Many states have "fly away exemptions" that mean you don't pay sales tax just for buying the plane in that state as long as you take it out of state immediately. If they don't, meet in a nearby state that does 

Edited March 2, 2019 by peevee

[Yetti]

For the information you provided you fit the occasional exemption on the Texas Sales tax.   What you may find is that the County of registration will view the plane as an asset being used in a business and want you to tax you like it is like office furniture.

I am not credentialed in any matters that you have brought before the forum and if you would like to take advice from a large mythical furry creature YMMV.  Closed Driver on Professional Course.