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Be careful in Maine

flyeyes

flyeyes

Well Known Member
There is a long thread right now on the Cirrus list about tax collection in Maine.

A Cirrus owner who lives in Massachusetts bought a new Cirrus in Duluth, MN several years ago. The owner lives, works, and has the aircraft registered in MA, which apparently has a sales tax exemption for aircraft.

The problem for him is that he vacations in Maine. The state government used IFR flight records to determine that he traveled in Maine, and is billing him for "use tax" amounting to 5% of the value of the aircraft, plus several years of interest at 12%. The total bill is over $26,000, not including the $5k he has in legal fees to date.

The rules are somewhat arbitrary, but in 2005 they decided to go after people who bought aircraft in states with no sales tax (like Oregon), and who spend at least part of 20 days in Maine in 12 months. They apparently have decided to apply it retroactively to 2000 or so, and are going after aircraft owners who haven't paid a use or sales tax, even if they aren't Maine residents.

I have certainly flown to Maine for vacation in the past (I added up almost 100 days I have spent in Maine in my lifetime, traveling by private plane) but fortunately not since 2000. I suspect that many pilots in the Northeast would spend a lot of time there.

It seems to me that this is terrible policy, and it certainly makes me wary of traveling to Maine again. If any listers are Maine residents or frequent visitors, it might be worth a note to a legislator.
 
This sets a horrible precedent. Are they going to send me a tax bill if I drive my car into Maine?

Do we have the whole story here, is the person in question a Maine resident? If not I don't see how any use tax could apply.
 
This IS a horrible precedent! I hadn't heard anything of it before.

I used to snowmobile in Maine and I can remember a tax scheme they had concocted whereas if you paid 5% MA sales tax and used your sled in Maine, you owed the state of Maine the 2% balance. That disappeared and they no longer do it anymore.

BTW, the MA aviation tax exemption is likely to end, so if you are interested in benefiting from it, you best do it soon!

Check out the Massachusetts Aeronautics Commission website for information.

:rolleyes: CJ
 
Lovely. Looks like this is 36 M.R.S.A. ?1760, sub-?45:

An aircraft purchased and used outside of Maine but subsequently used in Maine will be exempt from use tax provided the aircraft is not present in Maine for more than 20 days during the 12 months following its purchase. Any time during which the aircraft is present in Maine for major alterations, major repairs or preventive maintenance is not counted against those 20 days.
​

Note that this applies only for the first 12 months after purchase (at least it does for the moment ... tax man always finds ways to get paid)

Solution #1 - Don't file IFR in Maine so it's harder to track you (way to encourage safety, guys!)

Solution #2 - Don't stay for more than 19 days

Solution #3 - Tell the Government of Maine to stuff it and go vacation in Oregon. They have less snow and your RV likes being back "home" better anyway. :D

TODR
 
the_other_dougreeves said:
(snip)
Solution #1 - Don't file IFR in Maine so it's harder to track you (way to encourage safety, guys!)

Solution #2 - Don't stay for more than 19 days
(snip)
TODR
Click to expand...

A problem with the definition is that any portion of a day is considered a whole day. So if you lived in Massachusetts or Vermont and practiced IFR approaches at Maine airport every other weekend through the first year to get familiar with your new plane, you're hosed.

One weekend in Bar Harbor and a few fly-in breakfasts would be enough to put you over the edge for that matter...
 
If you think that tax is bad you should try living here, I'm sure if they can think of a way to tax the air we breathe they will try to get that passed also. It says vacationland on our license plates but it should read taxationland.
 
High Taxes: MOVE

Just a small plug. I live in Louisiana and basically we have the same weather as Florida. I live in Lafayette, a progressive college town in the southern part of the state. We are inland enough to avoid major hurricane damage. We are ranked one of the lowest states for taxes. We have a state income tax unlike Florida and Texas but both of those states have much higher property taxes.

We have very mild winters, today it is in the 70's and although our summers are very hot and humid, you can still fly in the morning.

Just a plug. I grew up in Colorado but would not live there, too crowded, too expensive, too californicated.
 
Update: The Maine Revenue folks must have gotten word that pilots were "curious" about their new policy. AOPA carried this clarification today:

Thanks to numerous pilots' calls to the Maine Revenue Service, the department has clarified its use-tax policy on out-of-state aircraft. Changes to the state's tax law went into effect Jan. 1, 2007. During the first 12 months after an aircraft is purchased in a state without a sales tax, the current use tax will only be assessed on that aircraft if it is in Maine for more than 20 days, cxcluding time for maintenance.

So there you go.

TODR
 
I guess you are just going to have to fly VFR into Maine from now on, plus don't file a flight plan. I suppose turning off your flashers and painting the plane white and making sure you have the small numbers might help also.
 
Who knows how far up the food chain they get their IFR data from, but maybe those that fly to maine often could try something like this:

http://web.nbaa.org/public/ops/asdi/form.php
Block Aircraft Registration Request (BARR)

--------------------------

I think ADS-B and/or Mode-S will be the end for privacy of this kind of transportation as there are already some home receiver "projects" around.
 
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tell us more on this. I for one hate it that someone can get my information with my tail number, would this take care of this infringment.
 
Place witty title here...

the_other_dougreeves said:
Update: The Maine Revenue folks must have gotten word that pilots were "curious" about their new policy. AOPA carried this clarification today:

Thanks to numerous pilots' calls to the Maine Revenue Service, the department has clarified its use-tax policy on out-of-state aircraft. Changes to the state's tax law went into effect Jan. 1, 2007. During the first 12 months after an aircraft is purchased in a state without a sales tax, the current use tax will only be assessed on that aircraft if it is in Maine for more than 20 days, cxcluding time for maintenance.

So there you go.

TODR
Click to expand...


I live in Tennessee where there is no state income tax, plenty of sales and use tax but no state income tax. I paid "voluntarily" a use tax on my RV when the components came in... it wasn't cheap. I still worry that some "smart guy" in some state audit some where some year will decide I didn't do something right or they will change the law retroactively and I'll get wacked down the road... very unexpectedly. The usual "penalties and interest" will follow.

I feel like I'm walking in a mine field to be honest with you. The way the Maine law reads it sounds like a money grab from your home state who decided to generate revenue in a different way, so the state of Maine decides they will trump up a way to grab the cash your home state left on the table. I think it is an ill conceived law and will hurt the state economy in the end.

Years ago some countrymen of ours had a tea party over what amounted to about a 2% tax. What percentage are we all paying now?
 
Well, numerous corporate aircraft operators block their numbers from being used to follow them, for competitive and security reasons. I sure this must be available to other private operators as well. What follows are purely suppositions:

I suppose what maine was doing was using one of the free sites to follow movements into and out of the state, then once they have "a fish", they threaten the owner with a tax bill, and if it ever went to court they would file a request with the faa to get official records to be used in court.

I suppose the state could have their own data feed (I don't think this is cheap), but I am not sure if the faa would unblock the blocked ones for them. But this would be an extra expense for the state; which might not matter as I hear they are near the top taxing state in the country.

If free sites are the source of the states initial "bites", if you block your number, you may never show up on their "fish finder".

I hope that privacy becomes more of an issue before mode-S or ads-b becomes widespread, as it apparently offers no privacy right now. The home hardware is already available to follow an aircraft within range of the hardware's receiver. (get a few receiver-station-servers linked together via the internet and you have a problem).

If someone is really worried about having flown ifr to maine (for 3 weeks) they could wait for a nice day, file ifr back across the line, then fly the reverse vfr. (or enroute to maine, if the wx is good, change your ifr destination to some non-maine border town, then cancel ifr).

Let the "evidence" work for you. :]
 
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I found that in my 900hrs in the last 4 years that it is a good idea to:

limit your visual- meaning if they can't see you it won't hurt them.

limit your transmission- if they can't hear you, then they can't go after you

limit your noise- if they can't hear you then they can't see you and then they can't do you any harm.

of course this goes for people on the ground.

When it comes to things like this, just fly in without any prenotice. heck with em. Go to airports that don't have a tower. I feel that if you did go into a tower airport and call in from 10miles out isn't going to alert anybody either so I think that is safe.

I truelly believe when you are dealing with the above about somebody on the ground your worse enemy will be another pilot, sad, but very true.
 
This whole thing just rubs me the wrong way.

I live in Oregon. We don't have sales tax. We run our state services with income tax. Why should Maine get to decide that we are doing it wrong in Oregon, or any other state?

I understand that if you live in Maine and are trying to avoid sales tax by buying else were and not reporting it, that they should want to collect tax on that purchase.

It seams that this policy is only going to hurt tourism. If I ever get back East to vacation, I will be very careful to either avoid Maine or stay for a very short time.

I don't want to offend anyone from Maine, but you guys need to get your representatives to get with the program and support out of state money coming in.

I was also upset when I heard that Oregon State Aviation was charging landing fees to out of state visitor for Vans Home Coming. I called them to get the answer and they agreed that it was a mistake.

Kent
 
kentb said:
I live in Oregon. We don't have sales tax. We run our state services with income tax. Why should Maine get to decide that we are doing it wrong in Oregon, or any other state?

I understand that if you live in Maine and are trying to avoid sales tax by buying else were and not reporting it, that they should want to collect tax on that purchase.

It seams that this policy is only going to hurt tourism. If I ever get back East to vacation, I will be very careful to either avoid Maine or stay for a very short time.

I don't want to offend anyone from Maine, but you guys need to get your representatives to get with the program and support out of state money coming in.

I was also upset when I heard that Oregon State Aviation was charging landing fees to out of state visitor for Vans Home Coming. I called them to get the answer and they agreed that it was a mistake.

Kent
Click to expand...

I agree 100%. As a matter of fact, I think it should be illegal. If I didn't lose something in the translation, Maine should NEVER be able to take anythin from a non-resident. That's like a financial spiderweb. Come too close and we got you! Frankly, I can't see how it can stand up in court. What jurisdication does another state havee over your property or finances!?

The vacationland ...:rolleyes:
 
I don't even understand how a state can tax a transaction that took place completely out of state.

Say I'm a Maine resident and I drive somewhere else to buy something. Why should Maine be able to collect tax on this transaction? It didn't happen on Maine soil, therefore Maine has nothing to do with the transaction. People dodge unfair taxes like this for a reason. It's unfair.

Lets not even go into why they can collect sales tax on anything used that's already been taxed at the initial purchase. Any time I hand anyone money, the state wants to collect tax on the transaction. (I have no idea if this Cirrus was used or new).
 
embarassing

I haven't chimed in on this thread because I live in Maine, and I find this shameless grab for money both embarrassing and infuriating. We are not a wealthy state. We derive a significant portion of our revenue from people who vacation here. Our state moniker is "Vacationland." One of the first signs that you see when you enter the state on I95 is "Maine, The Way Life Should Be." Clearly we are conveying to visitors that we would like them to visit, stay, live etc.

Now our less than intelligent governor and his cronies in the state house have concocted yet another way to make our state less then appealing to those who generate the revenue that keep this state alive. What can I say. I have seen idiocy, jealousy and poor fiscal policy ruin other economies. I hope it doesn't get that bad here.

Living in tax free NH is looking more appealing by the day --- particularly with my recent job offer in Boston:eek:
 
one more thing

To follow up on Sean's comment -- yes Maine seeks to grab sales tax on any item purchased out of state and used in state.

If I purchase a car in tax free New Hampshire, I have to pay sales tax when I register the car in Maine. Not only that, but our annual registration fee is based on the residual value of the car.

I have to pay sales tax on all of the airplane parts I buy out of state. If I don't pay it up front, I will have to pay it when I register the plane.

Frustrating.
 
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Other States Just as Bad as Maine

A friend of mine's Dad bought a plane while he lived in Ohio which did not require sales tax to be collected on purchases of vehicles between individuals. Several years pasted and they moved to Wisconsin. Wisconsin knew the law in Ohio so knew that no sales tax was collected and charged him sales tax on the purchase because now he was a Wisconsin resident. He tried to fight it but ended up paying. Isn't Wisconsin supposed to be one of the airplane friendly states? Maybe the law has since changed as this happened 15 years ago.
It would be nice if AOPA or someone had a website with all these "gotch ya" laws that the different states have. Drawing attention to these issues helps getting states to change them.
 
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aparchment said:
Living in tax free NH is looking more appealing by the day --- particularly with my recent job offer in Boston:eek:
Click to expand...
Maybe not so good if it works there like it does here:
I live in Washington (sales tax, but no income tax) and work in Oregon (income tax but no sales tax). I pay over 8% in sales taxes most of the time, AND approx. 9% income tax all the time!
I get no benefit from the income taxes I pay (road upkeep comes out of the gas tax), so they must consider it only fair that I don't get a say in how much they take or what it's used for!
 
WA vs OR

N674P said:
Maybe not so good if it works there like it does here:
I live in Washington (sales tax, but no income tax) and work in Oregon (income tax but no sales tax). I pay over 8% in sales taxes most of the time, AND approx. 9% income tax all the time!
I get no benefit from the income taxes I pay (road upkeep comes out of the gas tax), so they must consider it only fair that I don't get a say in how much they take or what it's used for!
Click to expand...

Johnny... I thought all of Vancouver, WA shopped on the other side of the bridge in Portland....:D

gil A
 
az_gila said:
Johnny... I thought all of Vancouver, WA shopped on the other side of the bridge in Portland....:D

gil A
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Gil - A lot of shopping is done in Portland, but there is more opportunity to shop in Vancouver coming all the time. And these big box and national stores wouldn't be coming in if there weren't some bucks to be made...
I do probably half my shopping in Oregon ('cause I'm there), but would do most of my shopping in Washington if I had no other reason to be down south.
 
More than one way to skin a cat

The solution is quite simple. The exemption to the law is if the AC is in the Maine for maintenance. If you come to Maine within the first 12 months of ownership remember to bring your log books and have an A&P check the air in your tires or something or something simple like that. The law does not establish what maintenance is or is required as qualification.

Maine a great place to live but a tough place to make a living.

Russ in Taxationland ?
RV9A
 
Not just planes....

I live in NH and those Maine folks will do just about anything to make a buck. Alcohol in NH is significantly cheaper than in Maine and Mass (as it is controlled by our government, in a good way though), so many folks near the border will travel across to our state liquor stores to buy booze. The Maine highway patrol would sit in the parking lot across the street from the liquor store and write down the license plates of Maine vehicles. Then they were either taxed or fined, not sure which, for bringing alcohol across the border. NH cops caught on and would give the Maine cops tickets for loitering. Sweet revenge...

Not sure if the rest of this is true, but...

The Maine cops, tired of the tickets, would park just across the border in sight of the store parking lot and would use binoculars to get the license plates.

NH then built a fence.
 
Thank Ed, I LOL

theflyboy1 said:
I live in NH and those Maine folks will do just about anything to make a buck. Alcohol in NH is significantly cheaper than in Maine and Mass (as it is controlled by our government, in a good way though), so many folks near the border will travel across to our state liquor stores to buy booze. The Maine highway patrol would sit in the parking lot across the street from the liquor store and write down the license plates of Maine vehicles. Then they were either taxed or fined, not sure which, for bringing alcohol across the border. NH cops caught on and would give the Maine cops tickets for loitering. Sweet revenge...

Not sure if the rest of this is true, but...

The Maine cops, tired of the tickets, would park just across the border in sight of the store parking lot and would use binoculars to get the license plates.

NH then built a fence.
Click to expand...

Don't know how much is true and how much is folklor, but it would make a good addition for one of those cop comedy movies.

Kent
 
From Aero News Net, an update on Maine and the Airplane Tax; also it has some interesting info, including a supposed similar requirement in Washington (State of, not DC; please don't call it "Washington State"), where you're taxed if you have the airplane there for more than 90 days, and Florida, where you can be taxed if the airplane spends any amount of time there within the first six months.

http://www.aero-news.net/index.cfm?ContentBlockID=d79f4e50-10c0-4c92-8010-60194ad7070e&

TODR
 
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Who said it?

"A tax is a fine for doing something right and a fine is a tax for doing something wrong"

"Revolution every 100 years or so is good for a democracy"

"Political correctness is incorrect"


theflyboy1 said:
I live in NH and those Maine folks will do just about anything to make a buck. Alcohol in NH is significantly cheaper than in Maine and Mass (as it is controlled by our government, in a good way though), so many folks near the border will travel across to our state liquor stores to buy booze. The Maine highway patrol would sit in the parking lot across the street from the liquor store and write down the license plates of Maine vehicles. Then they were either taxed or fined, not sure which, for bringing alcohol across the border. NH cops caught on and would give the Maine cops tickets for loitering. Sweet revenge...

Not sure if the rest of this is true, but...

The Maine cops, tired of the tickets, would park just across the border in sight of the store parking lot and would use binoculars to get the license plates.

NH then built a fence.
Click to expand...
 
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