I bought my airplane outside the state of California. The California State Board of Equalization will try (probably successfully) to tax my purchase at 7.37 percent even though it was made outside the state. My question is (to all the California 170'ers):
What, if any, means are out there to mitigate this tax burden?
Any thoughts or leads for me to follow will be helpful.
Thanks,
Mike
California Tax help/Advice
Moderators: GAHorn, Karl Towle, Bruce Fenstermacher
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Mike Smith
- Posts: 175
- Joined: Mon Jun 02, 2003 2:53 pm
California Tax help/Advice
Mike Smith
1950 C-170A
1950 C-170A
Sorry Mike, unless you can legally show your primary address is not in California - your stuck. I bought my 170 over ten years ago in Nevada, and couldn't come up with anything to avoid the sales tax.
However, since the 170 is deemed a classic, you can get out of paying the annual property tax if you can show that the airplane was on display for I believe 12 days a year?? This can be done by taking it to some of the antique air shows (Watsonville, Merced, etc.) or some war bird guys have actually set up there hangars as "museums", but don't ask me how that works
However, since the 170 is deemed a classic, you can get out of paying the annual property tax if you can show that the airplane was on display for I believe 12 days a year?? This can be done by taking it to some of the antique air shows (Watsonville, Merced, etc.) or some war bird guys have actually set up there hangars as "museums", but don't ask me how that works
Karl
'53 170B N3158B SN:25400
ASW-20BL
'53 170B N3158B SN:25400
ASW-20BL
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Mike Smith
- Posts: 175
- Joined: Mon Jun 02, 2003 2:53 pm
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Doug Echelberger
- Posts: 15
- Joined: Fri Apr 26, 2002 4:03 am
Milke,
About the County Tax. I am in Stanislaus county and have been doing the "display thing" for the past 12 years or so. What it intails is. First you file a form showing your airplane is "Of Significant Historical Value" with the county tax man and pay a one time $35 fee. They will send you a form each year where you list the 12 days your aircraft was on display. You need to indicate the event, a contact person and a phone number. The events just need to be published and I think you need to display 4 hours to get credit. It is pretty straight forward and a real help to those of us who are on a tight budget.
Doug
About the County Tax. I am in Stanislaus county and have been doing the "display thing" for the past 12 years or so. What it intails is. First you file a form showing your airplane is "Of Significant Historical Value" with the county tax man and pay a one time $35 fee. They will send you a form each year where you list the 12 days your aircraft was on display. You need to indicate the event, a contact person and a phone number. The events just need to be published and I think you need to display 4 hours to get credit. It is pretty straight forward and a real help to those of us who are on a tight budget.
Doug
Doug
N2426D
North Calif.
N2426D
North Calif.
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rudymantel
- Posts: 451
- Joined: Sat Nov 23, 2002 4:03 pm
In Florida you're liable for sales tax no matter where you bought your airplane (or boat). They check on the FAA Registry and come for their tax. When I moved to Florida from Jamaica in 1980 I came up in my Aero Commander which I had owned for several years. They came after me for tax. I only got out of it by promptly selling the airplane in Georgia.
But at least we have no income taxes !
Rudy
But at least we have no income taxes !
Rudy
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Mike Smith
- Posts: 175
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zero.one.victor
- Posts: 2271
- Joined: Tue Apr 23, 2002 12:11 am
Registering an airplane in Washington entails paying a state "use tax",which amazingly enough is the same rate as state sales tax. Unless you can document tnat you've already paid sales/use tax in some other state on the airplane,as in moving here with an already owned airplane as opposed to being a resident with a newly bought airplane.
SOME people phony up the purchase price on their bill of sale,enough to where I hear the state is now basing tax assessed on blue book value & not on purchase price. If you try to skate on registering the plane,the state will eventually start hounding you for the tax money,I think they probably monitor the FAA registration database.
Eric
SOME people phony up the purchase price on their bill of sale,enough to where I hear the state is now basing tax assessed on blue book value & not on purchase price. If you try to skate on registering the plane,the state will eventually start hounding you for the tax money,I think they probably monitor the FAA registration database.
Eric
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rudymantel
- Posts: 451
- Joined: Sat Nov 23, 2002 4:03 pm
Florida's tax is exactly as Eric described for Washington.
It's also called a "Use" or "User" tax and is the same as the sales tax. But credit for sales tax paid in another state is only applied if that state has a tax treaty with Florida ! So it's actually possible to have to pay sales tax twice !
Rudy
It's also called a "Use" or "User" tax and is the same as the sales tax. But credit for sales tax paid in another state is only applied if that state has a tax treaty with Florida ! So it's actually possible to have to pay sales tax twice !
Rudy
One of my company's clients is the former Comptroller of the state (who collected the state/s sales/use taxes). As his pilot, of many years, I also worked in one of that agency's divisions, and of course I received every question regarding airplanes, from "why did the airliner crash yesterday?" to "how do I avoid the sales/use taxes?" (My brother works in that division even now as a tax counselor.)
In Texas, like many other states, there are sales taxes on vehicles, including airplanes. If the vehicle was purchased out of state, then the tax must be paid in the state of purchase, unless that state has no sales tax on aircraft, in which case a "use" tax must be paid to Texas. This entire idea is to put an end to people who for years avoided paying their legally due taxes by making out of state purchases. (In the early '80s, I actually flew a turboprop all the way from STL to ILG just to sign the bill of sale in front of a notary, then flew it to Texas, to avoid the sales taxes on the thing. It was registered to a P.O. drop-box the company kept in Utah for the purpose, and a local person was paid to re-direct mail from that box to me, as chief pilot. That's how I got the FAA issued AD notes, always a week late, of course. But the scheme avoided millions of dollars in company property and sales taxes.)
These days, govt's have wised up, and are closing tax loopholes because their going broke. That's why the "use" tax was created,...so even if you did buy it in a state that didn't tax it, you still have to pay the tax somewhere (and hopefully that somewhere is in your home state.)
Texas has a legitimate method to avoid the tax. (I don't know if this applies elsewhere or not.) If the aircraft is for personal use, and if it is a replacement aircraft, (i.e., you bought it to replace a previous aircraft), and if you don't do this more than once every two years,....it falls under an "occasional sale" exemption. (Like a contact approach, you have to know about it and you have to instigate the request for the it,...they're not gonna hunt you down and inform you.)
The state uses the FAA aircraft registry to obtain the mailing addresses of bew/recent aircraft owners/purchasers to determine if they owe the one-time assessable tax. A tax investigator with the agency will not likely go after a small aircraft (less than $50K value), but a large twin or corporate jet will get their attention, and it'll be deemed worth the time to go locate that airplane to see where it's primarily hangared. If it's found to live within the state most of the year, ....bang,...it gets taxed
In Texas, like many other states, there are sales taxes on vehicles, including airplanes. If the vehicle was purchased out of state, then the tax must be paid in the state of purchase, unless that state has no sales tax on aircraft, in which case a "use" tax must be paid to Texas. This entire idea is to put an end to people who for years avoided paying their legally due taxes by making out of state purchases. (In the early '80s, I actually flew a turboprop all the way from STL to ILG just to sign the bill of sale in front of a notary, then flew it to Texas, to avoid the sales taxes on the thing. It was registered to a P.O. drop-box the company kept in Utah for the purpose, and a local person was paid to re-direct mail from that box to me, as chief pilot. That's how I got the FAA issued AD notes, always a week late, of course. But the scheme avoided millions of dollars in company property and sales taxes.)
These days, govt's have wised up, and are closing tax loopholes because their going broke. That's why the "use" tax was created,...so even if you did buy it in a state that didn't tax it, you still have to pay the tax somewhere (and hopefully that somewhere is in your home state.)
Texas has a legitimate method to avoid the tax. (I don't know if this applies elsewhere or not.) If the aircraft is for personal use, and if it is a replacement aircraft, (i.e., you bought it to replace a previous aircraft), and if you don't do this more than once every two years,....it falls under an "occasional sale" exemption. (Like a contact approach, you have to know about it and you have to instigate the request for the it,...they're not gonna hunt you down and inform you.)
The state uses the FAA aircraft registry to obtain the mailing addresses of bew/recent aircraft owners/purchasers to determine if they owe the one-time assessable tax. A tax investigator with the agency will not likely go after a small aircraft (less than $50K value), but a large twin or corporate jet will get their attention, and it'll be deemed worth the time to go locate that airplane to see where it's primarily hangared. If it's found to live within the state most of the year, ....bang,...it gets taxed
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pauldpilot
- Posts: 21
- Joined: Sun Mar 09, 2003 6:06 am
california tax
You can leave the aircraft outside the state for the first 90 days. Or fly it outside the state for 51% or greater for the first 6 months, or put it under Pt. 135
If you are very close to a state border, you mite have to go across the border for your hamburgers.
If you are very close to a state border, you mite have to go across the border for your hamburgers.
pauldpilot
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pauldpilot
- Posts: 21
- Joined: Sun Mar 09, 2003 6:06 am
ca sales tax
I see from one of your earlier posts, that you flew to OSH. That may go a long way toward the 51% out of state for the first six months rule.
pauldpilot