Tax on Purchase

[Buster1]

I realize that this is a big question and every state is different, but I can't seem to find a lot of specific info about buying a plane and then paying taxes.

Do you pay taxes to the seller, to the state where bought, or to the state where you register the plane?  How does all that work, what are some assumed costs, and are there annual costs to watch out for too (with regard to taxes).

Heard you might be able to register a plane in a tax free state, but that can be 'iffy' if you don't live there.

[Bob]

In most states you pay it to the state, simular to buying a car from a private party.  This may help.

http://tax.utah.gov/selfreview/aircraft/faq.pdf

[etekberg]

Most states become aware of the sale after you register the aircraft with the FAA.  They probably periodically search the FAA database for new registrations.

[Buster1]

ILXLR8...which state?  Of purchase or registration?  thanx!

[etekberg]

Not him, but typically the state you register it in.  However, I have heard that a select few states will try to tax you for a buying a plane there.  However, that is just heresay.  So you best check.

[KSMooniac]

Your only safe answer is to engage an aircraft tax specialist in your state, which might be a CPA and/or attorney.  The rules vary by state, and the costs are significant enough to get professional advice in my opinion.  Some states allow for a "casual sale" between two individuals to be tax-free, but others will not and demand either a sales tax or a use tax.  Buying from a broker may or may not trigger tax.  Buying from an FBO or dealer usually will. 

[Parker_Woodruff]

And don't be surprised if you follow all the tax laws for a tax-free sale and the state comes along looking for sales tax.  I was exempt under the Texas Statement of Occasional Sale, but I'm waiting for the day when I get notice saying that I owe $6000+

 

They can and will try to collect when they shouldn't.

[mooneygirl]

Also remember that for $29 additional you can get the legal representation from AOPA. This allows instead of the one instance per year, unlimited consult in the case of an aircraft purchase. They are helpful, knowledable and for $29 it is hard to beat.

[DonMuncy]

Parker,

In Texas, counties (and perhaps cities) require that you "declare" your personal property and pay (yearly) taxes on it.  I do not know anyone who does this, but the reqirement is there; or at least it was the last time I looked at the law. 

Don

[Parker_Woodruff]

Quote: DonMuncy

Parker,

In Texas, counties (and perhaps cities) require that you "declare" your personal property and pay (yearly) taxes on it.  I do not know anyone who does this, but the reqirement is there; or at least it was the last time I looked at the law. 

Don

[fantom]

Quote: mooneygirl

Also remember that for $29 additional you can get the legal representation from AOPA. This allows instead of the one instance per year, unlimited consult in the case of an aircraft purchase. They are helpful, knowledable and for $29 it is hard to beat.

[bgpilot1]

I've bought two planes and have done a lot of research on this topic.  Also spoken to state agencies in WA and TN.  All but about 10 states will charge you "use" tax on an airplane purchase.  This is typically between 6 and 9 percent of the "value" or sale price of the airplane.  You are liable for use tax once the plane has been in the state for over 30 days.  Also, some states like WA require that you register the plane with them within 30 days.  WA charges an airplane yearly fee of around 100 bucks.  Some states such as Oregon and Montana do not charge use tax but lets say you keep the plane in OR but are in and out of WA for more than so many days per year  - they may try to collect use tax from you.  I believe Florida and Maine do the same.  Also, if you bought your plane and keep in in OR without paying use tax, then move to a state that requires use or sales tax, you are liable for the use tax unpaid or the percentage over what you paid in a previous state - based on the "value" of the plane at the time you bring it into the state.  There are a couple of exceptions.  Also, if you keep a plane in a state for maintenance or repairs you are typically not liable for the use tax.  For example, if you bought a plane in Arkansas, kept it there for 3 months for repairs - not liable, but when you bring it into your home state - you are liable for tax within 30 days of bringing it into your home state.  Message me if you want more specifics.  [i'm not a tax or lawyer guy so these are just guidelines from my research!]

For your specific state, you can go to their gov website and search for sales & use tax.  Tax is paid to your home state if an out of state purchase is made.  In this case, the seller is not responsible for charging.

Regards,

Barry