CA prop taxes when moving out of state

[Bolter]

I searched old posts, and did not find something exactly like this.  After many years in California, paying my taxes like a good citizen, I have moved.  I moved after the 1-Jan census, so I am on the records, and required to fill out my annual assessment.  The plane was moved from California to Washington in March.  I have updated the FAA registration as well. 

Since the California tax year is July to June, I will not be there during the tax year.  Can I be exempted from paying the 2019-2020 tax bill, even though I was based in California on 1-Jan when they did the census? 

Since I will pay a Washington fee, is this considered double taxation?  Is that a something I give to California (Orange County Assessor) to exempt myself?

thanks, -dan

[RobertGary1]

The tax is based on where the aircraft is based on Jan 1st at 12:01AM.

 

-Robert 

Edited April 19, 2019 by RobertGary1

[Ron McBride]

It’s California, you’re screwed.  I sold my plane last April and had to July 2018 to June 2019 taxes on it. So always sell before December and buy in January to get free of them. 

[Bolter]

25 minutes ago, RobertGary1 said:

The tax is based on where the aircraft is based on Jan 1st at 12:01AM.

Yep.  Just does not seem right if the associated tax year begins 6 months later, and I am not there to receive the supposed benefits of those tax dollars.  

[Bolter]

14 minutes ago, N803RM said:

It’s California, you’re screwed.  I sold my plane last April and had to July 2018 to June 2019 taxes on it. So always sell before December and buy in January to get free of them. 

That is even worse!  You did not have the plane at all in that time, after the sale.  

[RobertGary1]

17 minutes ago, N803RM said:

It’s California, you’re screwed.  I sold my plane last April and had to July 2018 to June 2019 taxes on it. So always sell before December and buy in January to get free of them. 

I'm surprised plane prices don't rise in December and fall in January to account for the taxes owed. Just like stock before and after a dividend is paid.

 

-Robert

[FloridaMan]

California is occupied territory. They say the Ivory Coast of Africa used to be a nice place too. Now while there are good people who are fleeing the unfortunate political results of generations of indoctrination in the schools, based on the shifting politics where people from California and New York are moving, it seems that the overwhelming majority are simply parasites who are looking for a healthier host. 

[jaylw314]

23 minutes ago, FloridaMan said:

California is occupied territory. They say the Ivory Coast of Africa used to be a nice place too. Now while there are good people who are fleeing the unfortunate political results of generations of indoctrination in the schools, based on the shifting politics where people from California and New York are moving, it seems that the overwhelming majority are simply parasites who are looking for a healthier host. 

Thanks for the political commentary

[ilovecornfields]

19 hours ago, Dan at S43 said:

That is even worse!  You did not have the plane at all in that time, after the sale.  

Even worse is that this applies to housing as well. Sold a condo and still had to pay the property tax bill for the next year. I also have to pay property tax for the hangar I RENT. That being said, I wouldn’t want to live anywhere else. I remember being in New Hampshire in the middle of winter, 10 below freezing and one of the guys at the fire station where we were based said “I’d never live in California - they have mudslides there!” To each their own...

[jaylw314]

23 minutes ago, ilovecornfields said:

Even worse is that this applies to housing as well. Sold a condo and still had to pay the property tax bill for the next year. I also have to pay property tax for the hangar I RENT. That being said, I wouldn’t want to live anywhere else. I remember being in New Hampshire in the middle of winter, 10 below freezing and one of the guys at the fire station where we were based said “I’d never live in California - they have mudslides there!” To each their own...

I lived in SoCal for most of my life, so when I moved to Oregon, I was shocked to realize what I thought was the color green all my life was just another shade of brown.  People think I'm nuts for moving to Oregon for the weather, so I point out that here, half the year we get free water that falls from the sky

That being said, although our income tax is high, we don't have sales, property or use tax here.  

[cujet]

1 hour ago, FloridaMan said:

California is occupied territory. They say the Ivory Coast of Africa used to be a nice place too. Now while there are good people who are fleeing the unfortunate political results of generations of indoctrination in the schools, based on the shifting politics where people from California and New York are moving, it seems that the overwhelming majority are simply parasites who are looking for a healthier host. 

Very well said. While politics is often a subject to be avoided, it's relevant here. My aviation dealings with the state of CA have been universally awful. When it comes to any of the many CA confiscatory policies we've run afoul of, I can sum it up in one typical CA statement: "we have investigated ourselves and found that we've done nothing wrong"  In other words, not once have we prevailed in court, despite clear evidence they are wrong. Nor, as a FL based flight department, have we ever been able to avoid payment of fees, pro-rated taxes, or other charges on any of our aircraft. If you are going to operate in CA, make sure you have money to burn. My suggestion, stay out of that wasteful, confiscatory and wildly insane state until you fully understand what the charges will be. 

 

Our flight department is based in West Palm Beach, FL. We purchased a brand new PC-12 (let's ignore the G550, EC135 and other toys for now) and California came after us for sales tax, as we took an extended (summer) trip to CA within 6 months of purchase. Unfortunately, a $5M plane is heavily taxed at 9.25% in San Jose, CA. After a prolonged and very expensive legal battle, we ended up paying the state of CA over $460K in tax for that trip. A trip that consisted of 3 landings in the state of CA. We've not been back. 

Oh, and for those who don't know, payment is made to the "California state board of Equalization". Bury your head in the sand and avoid aviation politics at your peril. Or, if you prefer, while flying over LAX, open your DV window, and every 2 minutes, release a $100 bill into the airstream. 

TLDR: CA politics = unfair taxation and unfair courts. 

Edited April 20, 2019 by cujet

[stevesm20b]

California sucks when it comes to taxes!

 

[Guest]

5 hours ago, cujet said:

Very well said. While politics is often a subject to be avoided, it's relevant here. My aviation dealings with the state of CA have been universally awful. When it comes to any of the many CA confiscatory policies we've run afoul of, I can sum it up in one typical CA statement: "we have investigated ourselves and found that we've done nothing wrong"  In other words, not once have we prevailed in court, despite clear evidence they are wrong. Nor, as a FL based flight department, have we ever been able to avoid payment of fees, pro-rated taxes, or other charges on any of our aircraft. If you are going to operate in CA, make sure you have money to burn. My suggestion, stay out of that wasteful, confiscatory and wildly insane state until you fully understand what the charges will be. 

 

Our flight department is based in West Palm Beach, FL. We purchased a brand new PC-12 (let's ignore the G550, EC135 and other toys for now) and California came after us for sales tax, as we took an extended (summer) trip to CA within 6 months of purchase. Unfortunately, a $5M plane is heavily taxed at 9.25% in San Jose, CA. After a prolonged and very expensive legal battle, we ended up paying the state of CA over $460K in tax for that trip. A trip that consisted of 3 landings in the state of CA. We've not been back. 

Oh, and for those who don't know, payment is made to the "California state board of Equalization". Bury your head in the sand and avoid aviation politics at your peril. Or, if you prefer, while flying over LAX, open your DV window, and every 2 minutes, release a $100 bill into the airstream. 

TLDR: CA politics = unfair taxation and unfair courts. 

Wow!  

[MikeOH]

Unreal.  I can't fathom how the BOE argued that you owed the tax????

Did you own property in California at the time of your visit?  That's about the only way I could see they could make this stick...maybe even a timeshare?

I know California has some weird regulation to prevent RESIDENTS from buying an airplane out of state and then bringing it into California within the first 6 mos, or year, or something.  Did they claim you had California 'residency' based on a summer vacation?

I am ashamed of my state...even more after hearing this!

 

[Dan208]

On 4/20/2019 at 11:32 AM, cujet said:

Very well said. While politics is often a subject to be avoided, it's relevant here. My aviation dealings with the state of CA have been universally awful. When it comes to any of the many CA confiscatory policies we've run afoul of, I can sum it up in one typical CA statement: "we have investigated ourselves and found that we've done nothing wrong"  In other words, not once have we prevailed in court, despite clear evidence they are wrong. Nor, as a FL based flight department, have we ever been able to avoid payment of fees, pro-rated taxes, or other charges on any of our aircraft. If you are going to operate in CA, make sure you have money to burn. My suggestion, stay out of that wasteful, confiscatory and wildly insane state until you fully understand what the charges will be. 

 

Our flight department is based in West Palm Beach, FL. We purchased a brand new PC-12 (let's ignore the G550, EC135 and other toys for now) and California came after us for sales tax, as we took an extended (summer) trip to CA within 6 months of purchase. Unfortunately, a $5M plane is heavily taxed at 9.25% in San Jose, CA. After a prolonged and very expensive legal battle, we ended up paying the state of CA over $460K in tax for that trip. A trip that consisted of 3 landings in the state of CA. We've not been back. 

Oh, and for those who don't know, payment is made to the "California state board of Equalization". Bury your head in the sand and avoid aviation politics at your peril. Or, if you prefer, while flying over LAX, open your DV window, and every 2 minutes, release a $100 bill into the airstream. 

TLDR: CA politics = unfair taxation and unfair courts. 

One word comes to mind . Communism.  Only the government is allowed to have such things , you deserve to be punished. 

We are planning on taking our young kids to Disney.  And we are flying from the west coast to Florida . I refuse to give Commifornia any of my money.

Edited April 21, 2019 by Dan208

[RobertGary1]

57 minutes ago, MikeOH said:

Unreal.  I can't fathom how the BOE argued that you owed the tax????

Did you own property in California at the time of your visit?  That's about the only way I could see they could make this stick...maybe even a timeshare?

I know California has some weird regulation to prevent RESIDENTS from buying an airplane out of state and then bringing it into California within the first 6 mos, or year, or something.  Did they claim you had California 'residency' based on a summer vacation?

I am ashamed of my state...even more after hearing this!

 

It doesn’t have anything to do with owning property. The census date for personal property is Jan 1st. If you are visiting then you can fill out a form and be excluded. But after a certain amount of time they consider you’re getting use of the property in the state. I travel often for New Years so I’ve gotten bills from 3 counties before. I just show them my real county the plane is kept and they back off. I do know they check. 

Similar if you buy a new plane and bring it into California in the first year they’ll charge you about 9% the purchase price as “use tax” because you use the plane in California. So aopa recommends not visiting California in the first year (actually there is a list of states). 

Btw California tax code talks about using California airspace. I’d love someone to get a court to clarify what that means. 

 

-Robert 

[FloridaMan]

[M016576]

2 hours ago, FloridaMan said:

If only that were the case (that wealth would flee)... then the democratic party would be forced to change its ways eventually.  But for some reason, lots of the wealthy and the majority of them *seem* to support their democratic leaders (take a look around the Bay Area, the north east, the coasts of California.)

although a large number of “California refugees” are spilling into my beloved state of Idaho... sadly their democratic views are following them.  Won’t be long before they consume that host too..

This whole thread reads like an Ayn Rand novel! I had a run in with the “state board of equalization” when I bought my first mooney (In Oregon) and flew it into California.  I was able to successfully avoid the 8.5% sales tax (it’s based on the county you are assessed to have flown the plane into) by paying an aviation lawyer to help me build a case as to why my plane was actually based in another state.  The cost of the lawyer was not insignificant.... but it was far cheaper than the tax on the plane.

Warning to all-  carefully read the state laws on buying/selling and flying an aircraft into the state of California *BEFORE* you do so!!!!

 

Edited April 21, 2019 by M016576

[KLRDMD]

15 hours ago, MikeOH said:

Unreal.  I can't fathom how the BOE argued that you owed the tax???? Did you own property in California at the time of your visit?  That's about the only way I could see they could make this stick...maybe even a timeshare? I know California has some weird regulation to prevent RESIDENTS from buying an airplane out of state and then bringing it into California within the first 6 mos, or year, or something.  Did they claim you had California 'residency' based on a summer vacation? I am ashamed of my state...even more after hearing this!

I have an even better story.

Many of you know that I'm a dentist anesthesiologist. Anesthesia is one of the recognized specialties in dentistry. Essentially, I only provide anesthesia for dental patients (in dental offices, surgery centers or hospital operating rooms). Further, I teach dental anesthesia residents full time for a large medical center in NY. Second and third year residents rotate in AZ and CA where I manage their rotations and work with them providing anesthesia and schedule them with five other attendings.

In 2013 we began a rotation at a surgery center in LA. This surgery center only sees patients with special needs for dentistry. In 2013 I obtained a dental license and general anesthesia permit in CA. I am paid by the medical center in NY, not by an entity in CA.

In 2016 I got a tax bill from the Board of Equalization (1984 much ?) in California saying I owed $42,000 in taxes from 2013. WTF ???

I called them and the person I spoke with didn't speak English well so I had no idea what she was trying to convey. I thanked her and hung up. The next day I called again and got someone that spoke English. It turns out that since I obtained a license to practice dentistry in CA in 2013, they *assumed* I became a resident of CA. Further, they *assumed* that I earned income in CA and failed to pay taxes on that income. They assessed me the taxes (plus penalties and interest) that an average dentist paid in CA in 2013. I told them in no uncertain terms that I was a resident of AZ and have been for decades and that I earned zero income from any CA entity in 2013 and cannot possibly owe any taxes there. They insisted that I was a resident of CA and failed to pay my taxes and owed the amount they said in taxes, penalties and interest. I went around and around with them. You cannot believe how frustrating this is.

It gets better. It seems the only way I could convince them that I made no money in CA was to have my accountant file a non-resident tax form from 2013 showing that I earned no income in CA in 2013. I said no I don't. I don't have to do that for the other 48 states. They said yes I do. Either file the form or pay the $42,000 in taxes, penalties and interest.

I filed it, and now they say I only owe them $1,600. WTF. I've just been ignoring that bill for the last three years but will have to deal with it at some point. I haven't stepped foot in CA since June 2018 although my residents still rotate there. I have one attending there and one resident so I manage that resident from a distance.

I'm just waiting for the 2014, 2015, 2016, 2017 & 2018 tax bills from CA 

Edited April 21, 2019 by KLRDMD

[MikeOH]

37 minutes ago, KLRDMD said:

I have an even better story.

Many of you know that I'm a dentist anesthesiologist. Anesthesia is one of the recognized specialties in dentistry. Essentially, I only provide anesthesia for dental patients (in dental offices, surgery centers or hospital operating rooms). Further, I teach dental anesthesia residents full time for a large medical center in NY. Second and third year residents rotate in AZ and CA where I manage their rotations and work with them providing anesthesia and schedule them with five other attendings.

In 2013 we began a rotation at a surgery center in LA. This surgery center only sees patients with special needs for dentistry. In 2013 I obtained a dental license and general anesthesia permit in CA. I am paid by the medical center in NY, not by an entity in CA.

In 2016 I got a tax bill from the Board of Equalization (1984 much ?) in California saying I owed $42,000 in taxes from 2013. WTF ???

I called them and the person I spoke with didn't speak English well so I had no idea what she was trying to convey. I thanked her and hung up. The next day I called again and got someone that spoke English. It turns out that since I obtained a license to practice dentistry in CA in 2013, they *assumed* I became a resident of CA. Further, they *assumed* that I earned income in CA and failed to pay taxes on that income. They assessed me the taxes (plus penalties and interest) that an average dentist paid in CA in 2013. I told them in no uncertain terms that I was a resident of AZ and have been for decades and that I earned zero income from any CA entity in 2013 and cannot possibly owe any taxes there. They insisted that I was a resident of CA and failed to pay my taxes and owed the amount they said in taxes, penalties and interest. I went around and around with them. You cannot believe how frustrating this is.

It gets better. It seems the only way I could convince them that I made no money in CA was to have my accountant file a non-resident tax form from 2013 showing that I earned no income in CA in 2013. I said no I don't. I don't have to do that for the other 48 states. They said yes I do. Either file the form or pay the $42,000 in taxes, penalties and interest.

I filed it, and now they say I only owe them $1,600. WTF. I've just been ignoring that bill for the last three years but will have to deal with it at some point. I haven't stepped foot in CA since June 2018 although my residents still rotate there. I have one attending there and one resident so I manage that resident from a distance.

I'm just waiting for the 2014, 2015, 2016, 2017 & 2018 tax bills from CA 

OMG!

That is just about the most disgusting thing I've ever heard!

That is an old fashioned mafia shakedown...incredible that it is legal.

[Jerry 5TJ]

I bought a P46T while living in California in 2011.  The California BoE has specific guidelines to show that the aircraft is a business asset and thus not subject to personal sales tax.  We followed those rules strictly and documented every flight for the required 6 months’ test interval. 

The BoE took their time but eventually issued a letter agreeing that the purchase was not subject to sales tax.   

Many states, I hear, do not issue such a judgement & so you’re left indefinitely wondering if the tax, interest and penalties are stacking up.

 

[RobertGary1]

2 hours ago, KLRDMD said:

I have an even better story.

Many of you know that I'm a dentist anesthesiologist. Anesthesia is one of the recognized specialties in dentistry. Essentially, I only provide anesthesia for dental patients (in dental offices, surgery centers or hospital operating rooms). Further, I teach dental anesthesia residents full time for a large medical center in NY. Second and third year residents rotate in AZ and CA where I manage their rotations and work with them providing anesthesia and schedule them with five other attendings.

In 2013 we began a rotation at a surgery center in LA. This surgery center only sees patients with special needs for dentistry. In 2013 I obtained a dental license and general anesthesia permit in CA. I am paid by the medical center in NY, not by an entity in CA.

In 2016 I got a tax bill from the Board of Equalization (1984 much ?) in California saying I owed $42,000 in taxes from 2013. WTF ???

I called them and the person I spoke with didn't speak English well so I had no idea what she was trying to convey. I thanked her and hung up. The next day I called again and got someone that spoke English. It turns out that since I obtained a license to practice dentistry in CA in 2013, they *assumed* I became a resident of CA. Further, they *assumed* that I earned income in CA and failed to pay taxes on that income. They assessed me the taxes (plus penalties and interest) that an average dentist paid in CA in 2013. I told them in no uncertain terms that I was a resident of AZ and have been for decades and that I earned zero income from any CA entity in 2013 and cannot possibly owe any taxes there. They insisted that I was a resident of CA and failed to pay my taxes and owed the amount they said in taxes, penalties and interest. I went around and around with them. You cannot believe how frustrating this is.

It gets better. It seems the only way I could convince them that I made no money in CA was to have my accountant file a non-resident tax form from 2013 showing that I earned no income in CA in 2013. I said no I don't. I don't have to do that for the other 48 states. They said yes I do. Either file the form or pay the $42,000 in taxes, penalties and interest.

I filed it, and now they say I only owe them $1,600. WTF. I've just been ignoring that bill for the last three years but will have to deal with it at some point. I haven't stepped foot in CA since June 2018 although my residents still rotate there. I have one attending there and one resident so I manage that resident from a distance.

I'm just waiting for the 2014, 2015, 2016, 2017 & 2018 tax bills from CA 

Actually that is super common and not at all unusual. The same happens for nearly all licensed professionals. My sisters fil got the same bill because he holds a contractor’s license in CA and my sister got one because she holds an RN in CA. 

-Robert 

[Jim Peace]

Dont worry Nancy has your back, paid this the other day in Canoga Park

[Guest]

Sounds like time for tax reform is overdue.  In Ontario it’s a one time tax at time of purchase, with businesses able to offset it against tax collected on sales.

No city or local government collects taxes on airplanes, maintenance etc.

Clarence

[kortopates]

I bought a P46T while living in California in 2011.  The California BoE has specific guidelines to show that the aircraft is a business asset and thus not subject to personal sales tax.  We followed those rules strictly and documented every flight for the required 6 months’ test interval. 
The BoE took their time but eventually issued a letter agreeing that the purchase was not subject to sales tax.   
Many states, I hear, do not issue such a judgement & so you’re left indefinitely wondering if the tax, interest and penalties are stacking up.
 

I did exactly the same thing back in 2003, wasn't hard, just had to leave the plane parked out of state for a few months (2 hr drive away, but for about $20k it was very worth it) Provided my documentation to the BOE and got my letter of exemption.


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