Sales and Use Tax Nonsense.....

[A64Pilot]

1 hour ago, NJMac said:

We're flying to Maine this summer for a vacation.  Found out Maine charges full sales tax if your plane is there over 20 days.  Don't tell VA, they may start reducing their days for tax to trigger. 

Curious, How did you find out?

[ArtVandelay]

We're flying to Maine this summer for a vacation.  Found out Maine charges full sales tax if your plane is there over 20 days.  Don't tell VA, they may start reducing their days for tax to trigger. 

So you plan to fly into Maine just for a few days, maintenance issues result you being grounded for 21 days and now you owe full sales tax?!

[Hank]

23 minutes ago, ArtVandelay said:

So you plan to fly into Maine just for a few days, maintenance issues result you being grounded for 21 days and now you owe full sales tax?!

"Welcome our glorious state! Please come visit often. You'll spend more than you ever thought . . . . "

[ArtVandelay]

"Welcome our glorious state! Please come visit often. You'll spend more than you ever thought . . . . "

AOPA summary:

[A64Pilot]

I wonder why the big $$$ airplanes are exempt, seems odd?

But on the your broken down thing, Fl for boats doesn’t count the time your broke down and are getting repaired.

‘I would hope that any state wouldn’t hold any days that the aircraft was un airworthy against you.

For instance buy a boat in Fl and you have 30 days to get it out, once it’s out for I Believe 6 months, it can return and no tax is due, but stay for than 90 days and it has to be registered, but no tax is due.

Edited April 24, 2021 by A64Pilot

[RobertGary1]

4 hours ago, A64Pilot said:

It’s simply greed, I don’t think the law is written with the average little GA airplane in mind, they are after the biz jets.

But they don’t get them, they only snare the little guys, that don’t know any better and don’t have professional pilots that take the aircraft back out of State.

I believe the laws are relatively new.

At least in California it’s not at all airplane specific. It includes refrigerators, rv’s, etc. 

[MikeOH]

5 minutes ago, RobertGary1 said:

At least in California it’s not at all airplane specific. It includes refrigerators, rv’s, etc. 

Gee, I feel so much better

<major sarcasm for the sleepy reader>

[Mooney217RN]

I would encourage any aircraft owner who doesn’t want to deal with the tax man to block their tail number through the FAA.  When blocked, you as the owner can authorize access to a friend, loved one, spouse, etc.  once blocked, ONLY the FAA can see the aircraft movement.  ADS-B is the primary mechanism taxing agencies use to assess your aircraft.

https://ladd.faa.gov

Edited April 24, 2021 by Mooney217RN
Insertion of FAA Link

[PT20J]

5 hours ago, A64Pilot said:

I wonder why the big $$$ airplanes are exempt, seems odd?

Because big $$$ aircraft are owned by wealthy or corporations. As Leona Helmsley famously said, “Only the little people pay taxes.”

[RobertGary1]

3 hours ago, Mooney217RN said:

I would encourage any aircraft owner who doesn’t want to deal with the tax man to block their tail number through the FAA.  When blocked, you as the owner can authorize access to a friend, loved one, spouse, etc.  once blocked, ONLY the FAA can see the aircraft movement.  ADS-B is the primary mechanism taxing agencies use to assess your aircraft.

https://ladd.faa.gov

Evading taxes just makes them more expensive in the future. 

[MikeOH]

44 minutes ago, RobertGary1 said:

Evading taxes just makes them more expensive in the future. 

Not trying to evade; I PAID my tax to Kalifornia.  I see no need to 'prove my innocence' to other states that seem to think they are entitled to more pounds of my flesh

[NotarPilot]

On 4/21/2021 at 11:11 AM, Mark89114 said:

I am just tired of the gov't overreach.  

 

Aren’t we all....

[Guest]

I’m amazed at the taxation some of you have to put up with.

Clarence

[Shadrach]

4 hours ago, M20Doc said:

I’m amazed at the taxation some of you have to put up with.

Clarence

That runs both ways. It seems to come down to what you’re accustomed.  I’m getting ready for a product launch in the Canadian market. My competitors price their products about 90% higher than in the US. I optimistically thought this would mean better margins but I was wrong. It’ll be close to a wash with the added costs of doing business. There is a reason why Canadian plates are frequently seen in Buffalo and it certainly isn’t because it’s a nicer city than Toronto...

Edited April 25, 2021 by Shadrach

[Guest]

In relation to airplanes, I paid taxes as I bought the kits for my RV when I brought them across the border, 13% split between the feds and province.  When we've bought other planes there was no tax payable when purchased in a private sale. 

My city, county or province don't come looking for additional taxes on an annual basis, nor have I heard of some government agency keeping track of where I fly and for how long I park in the hopes of collecting more money from me.

As for cross border shopping, Ive never found things to be dramatically cheaper stateside.

Clarence

[EricJ]

30 minutes ago, M20Doc said:

My city, county or province don't come looking for additional taxes on an annual basis, nor have I heard of some government agency keeping track of where I fly and for how long I park in the hopes of collecting more money from me.

As for cross border shopping, Ive never found things to be dramatically cheaper stateside.

Clarence

Ironically, the reason many of these local governments do this is to try to mitigate budget shortages due to "tax reductions" passed to appease the masses.   Stuff needs to get paid for, and if the budgets get slashed in order to reduce taxes or prevent raising them, this is not an unexpected result.

It's similar to people complaining about how long it takes the FAA (or most government agencies) to do things, because they run on a thin staff, because if they don't people complain that they're getting too much money and can operate on less.

I learned to fly in a place where you had to pay a landing fee every time you landed some place.   Part of the ritual of flying somewhere was walking to the ops building and paying the fee.   

 

[Shadrach]

On 4/25/2021 at 12:04 PM, EricJ said:

Ironically, the reason many of these local governments do this is to try to mitigate budget shortages due to "tax reductions" passed to appease the masses.   Stuff needs to get paid for, and if the budgets get slashed in order to reduce taxes or prevent raising them, this is not an unexpected result.

It's similar to people complaining about how long it takes the FAA (or most government agencies) to do things, because they run on a thin staff, because if they don't people complain that they're getting too much money and can operate on less.

I learned to fly in a place where you had to pay a landing fee every time you landed some place.   Part of the ritual of flying somewhere was walking to the ops building and paying the fee.   

 

Absolutely.  I'm sure we can all agree that the problem with state, federal and local government is due to under funding. People just don’t realize how much more could be done if these highly efficient bureaucracies were adequately funded....

Edited April 26, 2021 by Shadrach

[PT20J]

I used to live in California where taxes are pretty high. Every politician running for Governor always said that they could cut costs by reducing waste and fraud and they could always point to some egregious example of waste to make their point. Trouble is, they could never find enough actual waste or fraud to amount to much. The truth is that most government spending goes either directly or indirectly to payroll. You can only cut payroll so much. I read an article recently about how much money the government is loosing in uncollected taxes because various administrations have cut back IRS enforcement staffing. Did they really end up saving money, or did they just do wealthy constituents a favor? The IRS now audits very few high income taxpayer returns because they are complex and time consuming to audit though that's where the real tax avoidance is to be found. It's much easier to audit taxpayers claiming the Earned Income Credit and pick up a pittance here and there.

[bmcconnaha]

i have been down this road in Idaho for the last 4 years (bought and sold 4 airplanes).  I will not be paying sales tax on one ever again in Idaho.  the next one will be owned by my LLC in Montana, and leased to me.  end of story.  Ill pay tax on the "lease payment" on my next plane.   Most likely a bravo.  Idaho state tax commission can buzz off, or pound sand.  either works.  

[jaylw314]

A couple general tidbits I found when doing research on this issue:

• MOST states have a "flyaway rule"--if purchased in that state and then removed to another, no sales tax is due
• MOST states pursue a use tax if the aircraft is brought into the state for substantial use after purchase, and the use tax is almost always the same as sales tax
• MOST states have an exception for maintenance
• SOME states have a time limit on use tax, but I don't think any have a limit on sales tax
• SOME states have a casual sales exemption , the big one including California
• ALL states (I think) credit sales/use tax already paid to another, so that you are only liable for the difference (if any)
• NO state pro-rates their use tax, e.g if you only bring your plane into their state for 90 days, why wouldn't you only be liable for 1/4 of their use tax?  That would make too much sense.

Edited April 25, 2021 by jaylw314

[ArtVandelay]

25 minutes ago, bmcconnaha said:

i have been down this road in Idaho for the last 4 years (bought and sold 4 airplanes).  I will not be paying sales tax on one ever again in Idaho.  the next one will be owned by my LLC in Montana, and leased to me.  end of story.  Ill pay tax on the "lease payment" on my next plane.   Most likely a bravo.  Idaho state tax commission can buzz off, or pound sand.  either works.  

Some states like NC tax planes/boats based on where they’re kept. Doesn’t matter who or what kind of entity owns it. Marinas (and I assume airports) file a report to the state and they send you a bill.

[bmcconnaha]

9 minutes ago, ArtVandelay said:

Some states like NC tax planes/boats based on where they’re kept. Doesn’t matter who or what kind of entity owns it. Marinas (and I assume airports) file a report to the state and they send you a bill.

oh, ill "own" it in Idaho.  in Idaho you only pay sales tax on the lease payment.  nice smooth 100/mo lease payment sounds nice

[RobertGary1]

26 minutes ago, ArtVandelay said:

Some states like NC tax planes/boats based on where they’re kept. Doesn’t matter who or what kind of entity owns it. Marinas (and I assume airports) file a report to the state and they send you a bill.

Same with California. The only difference is if you put it in an out of state llc you pay an additional $800/yr fee to do business in California. 

[Shadrach]

1 hour ago, bmcconnaha said:

i have been down this road in Idaho for the last 4 years (bought and sold 4 airplanes).  I will not be paying sales tax on one ever again in Idaho.  the next one will be owned by my LLC in Montana, and leased to me.  end of story.  Ill pay tax on the "lease payment" on my next plane.   Most likely a bravo.  Idaho state tax commission can buzz off, or pound sand.  either works.  

This is exactly how perverse incentives work. Put egregious laws on the books and people pack up and take their business to Montana. Idaho then gets a big percentage a fewer and fewer transactions. 

[A64Pilot]

1 hour ago, bmcconnaha said:

oh, ill "own" it in Idaho.  in Idaho you only pay sales tax on the lease payment.  nice smooth 100/mo lease payment sounds nice

Why would you lease it? I know several people who own aircraft and very expensive motor homes ,or actually they own a Montana LLC that owns the aircraft or motor home and do not lease it. But gut says that if you do, that the lease payment ought to be realistic or if not it sounds too much like IRS bait.

Guy I bought my Mooney from had it in an LLC, he bought the LLC from someone else, and offered to sell me the LLC for the sales price of the airplane of course but it was a Ga LLC, and I didn’t want a Ga LLC.

I don’t know maybe someday the Montana LLC will be shut down, but until then it seems to be the way to go to me.

‘Many yeas ago my Father’s practice owned the C-210, and he had to rent the aircraft and pay  x number of dollars per hour for personal use, the dollar rate was high because he didn’t want anyone renting it, but that was 50 years ago.

I see owning a Montana LLC that has assets as no different than owning a Yacht that’s flagged in another Country. The big ones will have helicopters with N numbers, but I’m certain that they are registered either with or as a part of the boat, meaning no US tax is paid.

https://www.cayman-yacht-registration.com

https://www.newsweek.com/betsy-devos-cayman-islands-taxes-yacht-flag-foreign-donald-trump-america-1061960

Edited April 25, 2021 by A64Pilot