I have no use for USE TAX!

[FlyingAggie]

The reality of owning an airplane is starting to sink in as I get closer to actual ownership.  My initial plan was to intially base the plane at the LMO  where my instrument instructor works,  since he has 1000's of hours in Mooneys and a former MAPA Safety Foundation Instructor.  I thought it would be easy to gradually transition to the 262 by just resuming my IR in the new bird and taking my time getting comfortable and confident over the next twenty hours of IR dual.  After the IR, I would relocate the airplane at EIK which is practically my community's next door neighbor.

However, as I found out, use tax is based on where you base the airplane, not your home address.  My instructor's airport has almost the highest use tax in the area. Where I base my plane can cost me thousands of dollars!

 

Incidentally while researching use tax, I found a web site that one of the County's Tax Dept referenced saying they accept the accuracy of this web site for taxation purpose. (PM me if you would like the URL to the web site.) You input the street address including  the zip+4 code and it determines your use tax rate.  Here are the result for Denver area airports along with the drive time from my home:

APT    USE TAX    TAX COMPONENTS        DRIVE TIME FROM HOME                           

FTG       3.0%        S, SC                              50 mins                                              

BJC       4.1%        S,  R, FD, SC                   15 mins                                               

APA      4.35%       S, Co, R, FD, SC             40 mins

EIK        6.4%        S, Co                                  5 mins

FCL       6.7%        S, Co, Ci                           35 mins

LMO      8.025%     S, Co, Ci, R, FD, SC        20 mins

BDU      8.16%       S, Co, Ci, R, FD, SC        20 mins

 

KEY: S=State, Co=County, Ci=City, R=RTD, FD=Football Stadium District, SC=Science and Cultural District

I am leaning toward BJC because it fairly low and close.  It is a tower controlled airport with parallel rwys with an ILS, but there is a lot of traffic.  I was so pumped when we bought our house so close to EIK.  Blasted USE TAX!!!!!!

With the financial state of most state and local governments,  sales and use tax are going up.  No telling what it will be in the next few years.  Now might be a good time to buy.

Alan

 

[Parker_Woodruff]

Ugh...glad I got out of this under TX occasional sale.

You wanna base your plane down here in Waco?  Free tie-down.

 

How do they determine where you "base" an airplane anyway?

[piperpainter]

Is this based on the value of your airplane? They are trying to do this to us in WA with a 1/2% of our aircraft value each year. But jeeze, if you have to pay up to 8% a year that is rediculous and outragous.

[piperpainter]

.

[Ron McBride]

In California we pay approx. 9% Sales Tax on all purchases and I would estimate 1% personal property tax on our planes each year. I also pay about 1% Property Tax on my Hanger plus rent the ground each month.

 

Ron

[Ron McBride]

In California we pay approx. 9% Sales Tax on all purchases and I would estimate 1% personal property tax on our planes each year. I also pay about 1% Property Tax on my Hanger plus rent the ground each month.

 

Ron

[skyking]

i hereby swear i will never complain about Canadian Taxes again.

We pay sales tax when we buy the plane and then thats it.

We do get a bill from NAVCANADA each year for user fees but thats only a few bucks a year for our Mooneys.

If you have a hanger you pay property tax etc but nothing based on the value of the plane.

 

 

[randypugh]

Russ, speaking of user fees, what does that cost you per year? We have been worried and fighting that here in the states for some time so just curious what (how much)  we are fighting about.

[skyking]

My annual bill from navcanada is based on weight.

i pay 80 bucks a year

[RJBrown]

In Colorado they watch the FAA records and about a year later the send a questionaire. 30 days later they send a bill. They ask 4 questions Where did you take delivery? Where is it hangered? Is it for Business use? Is it for personal use? They also ask for a copy of the sales contract. Use tax is paid once on the purchase of the plane. It is like sales tax, sort of. If you trade in a plane you get a bill for only the difference. If you sell and then buy you pay on the whole purchase. Colorado has no other taxes on personal use airplanes. No registration fees of any kind.

I would reccomend  basing it at the cheepest place untill the taxes were settled. I don't believe that a change of address to or within Co raises a call from the tax man. 

I sold my last plane to someone in California. I delivered the plane to him in Nevada. The plane then stayed in Nevada for a certain length of time. I believe it was more than 90 days. He then did not owe the "sales" tax. 9% of 175000 was $15,500. There were rules that made it legal for him to avoid the tax. If I were in California I would research this before buying.

 

[RJBrown]

In Colorado they watch the FAA records and about a year later the send a questionaire. 30 days later they send a bill. They ask 4 questions Where did you take delivery? Where is it hangered? Is it for Business use? Is it for personal use? They also ask for a copy of the sales contract. Use tax is paid once on the purchase of the plane. It is like sales tax, sort of. If you trade in a plane you get a bill for only the difference. If you sell and then buy you pay on the whole purchase. Colorado has no other taxes on personal use airplanes. No registration fees of any kind.

I would reccomend  basing it at the cheepest place untill the taxes were settled. I don't believe that a change of address to or within Co raises a call from the tax man. 

I sold my last plane to someone in California. I delivered the plane to him in Nevada. The plane then stayed in Nevada for a certain length of time. I believe it was more than 90 days. He then did not owe the "sales" tax. 9% of 175000 was $15,500. There were rules that made it legal for him to avoid the tax. If I were in California I would research this before buying.

 

[SWI_Bob]

As we all know California is bankrupt, and so goes CA, so goes the nation. Fed & State govt's are clamping down on (out of state sales), (internet sales) in the use of "use tax". This is what my tax man told me about this subject.

California Sales and "Use Tax": If you purchased merchandise from a vendor located outside the state or Country, you may owe CA "Use Tax". This includes purchases you made over the internet. "Use Tax" is like a sales tax but you pay it directly to the state, rather than to the retailer. The rule of thumb is; you owe "Use Tax" if what you bought would have been subject to sales tax if you purchased it at a local store and did not pay CA sales tax. You generally owe "Use Tax" when you use, store or consume-in CA-tangible personal property purchased from outside of state vendors. If the vendor does not collect the tax on the purchase, the purchaser must pay the tax directly to the state. If you do not report and pay your "Use Tax" in a timely manner, such as with income tax return, the state will assess penalties and interest.

Common items subject to "Use Tax": Clothes, CD's, books, computers, cameras, toys, appliances, make-up, over the counter meds, collectibles, jewelry, sports equip., computers programs shipped on disc, e-bay stuff. New for 2009: must claim foreign bank accounts. Cash for clunkers could be taxable too.

On my 2009 CA State Form 540, the "Use Tax" line is #95

 

Have a nice day

 

[GeorgePerry]

I suppose that's what our current administration's wealth re-distribution" plan is all about...because if you own a plane you must be rich.