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06-07-2009, 07:35 PM
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Join Date: Sep 2006
Location: Defiance, MO
Posts: 1,674
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the tax man cometh
Quote:
Originally Posted by jsharkey
Received notice from Tax Office in same mail that delivered my registration certificate from the FAA. Called tax office and explained that I built and did not buy the aircraft and therefore didn't have a traditional bill of sale. Mailed of copies of major item receipts as requested and a couple of days later received a tax bill. Much to my dismay almost one third of it - or plus 50% - was interest and penalties.
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State of Missouri is out to try and get some revenue. Every one that registered a plane in MO in the last 6 years got a use tax bill this past month. Most have interest and penalties that exceeds our original bill.
Be careful out there, states are looking for cash and what better place to look then those wealthy aircraft owners who are such a minority that they will never get any public sympothy. Also it is easy to get records as airplane ownership is public records and anyone can look them up. Why is that? It should be no easier for someone to know what aircraft I own then for someone to know what cars or land I own.
__________________
Philip
RV-6A - 14+ years, 950+ hours
Based at 1H0 (Creve Coeur)
Paid dues yearly since 2007
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06-07-2009, 10:55 PM
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Join Date: May 2008
Location: central oregon
Posts: 1,089
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Is it ownership records or registration records that are public knowledge? could you form an llc or corp to "own" the plane and put the registration in that company? certain states are pretty protective of corporations.
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nothing special here...
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06-07-2009, 10:59 PM
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Join Date: Nov 2005
Posts: 1,256
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I've often wondered about this. What about forming a corporation in one of the states that is very corporation-friendly (I think Delaware comes to mind, maybe Nevada as well) and have that corporation own the plane. What would be the effect if, let's say, a Delaware corporation owned the aircraft but it was based in another state (like, say, California)?
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Steve "Flying Scotsman"
Santa Clarita, CA
PP-ASEL, ASES, Instrument Airplane
RV-7A N660WS flying!
#8,000
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06-08-2009, 12:02 AM
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Join Date: May 2005
Location: Santa Barbara, CA
Posts: 1,324
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Sorry, but no.
Quote:
Originally Posted by Flying Scotsman
I've often wondered about this. What about forming a corporation in one of the states that is very corporation-friendly (I think Delaware comes to mind, maybe Nevada as well) and have that corporation own the plane. What would be the effect if, let's say, a Delaware corporation owned the aircraft but it was based in another state (like, say, California)?
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It is all about where the airplane is based, not registered or the "owner's" location.
Some California law:
Section 5301 of the California Revenue and Taxation Code requires the annual assessment of non-commercial aircraft to the owners as of January 1 of each year.
Aircraft of historical significance may be eligible for exemption, if certain criteria are met. For more information, call the Aircraft Division at (559) 488-3545.
Determining the Situs* of the Aircraft
*(Latin for position or site) of property is where the property is treated as being located for legal purposes.
Non-commercial aircraft has situs for taxation purposes at the airport in which they are habitually situated when not in flight. (Property Tax Rule 205(b); Revenue and Taxation Code 5362)
The Assessor also relies on, but is not limited to, F.A.A. registration information in determining the taxable situs of the aircraft.
The purpose of the Aircraft Property Statement is to provide the Assessor with information regarding the aircraft that will aid in the determination of fair market value for the current year. This form is a legal affidavit for which the information provided is declared to be true under penalty of perjury.
Aircraft Property Statements are mailed to identified aircraft owners on March 1 for ownership as of January 1 and are required to be returned by April 1. The form must be completed in its entirety, with as much detail as possible regarding the current condition of the aircraft. Instructions and other general information are contained on the back of the form. Failure to file an Aircraft Property Statement will compel the Assessor to estimate the market value of the aircraft and apply a penalty assessment (Revenue and Taxation Code Sections 501 and 5367).
John Clark
RV8 N18U "Sunshine"
KSBA
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01-26-2010, 11:07 AM
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Join Date: Dec 2008
Location: na
Posts: 1,457
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Taxes???
How have you folks handled the inevitable taxation issue after applying for registration? How have you estimated value? Did you use the cost of materials? The cost of just the kit?
Thanks,
ken
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01-26-2010, 11:35 AM
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Join Date: Jan 2006
Location: Cape Coral, Florida
Posts: 259
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taxes
I am paying a portion of the state use taxes as I go. That way when the plane is finished, all taxes will have been paid, rather than one large painful payment at the end, when they catch you. I paid some in 08, will give them a nice check for 09 and finish with 10. Just keep your records to show you have paid the taxes.
Allan Stern
RV 8A N348AS reserved, "Toozicoot" 95% done
Lycoming 0-360 Hartzell CS GRT HX
RV 6A 570 RV "My Girl" 90 hours
0-320, Hartzell CS
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01-26-2010, 11:43 AM
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Join Date: Sep 2007
Location: Albuquerque, NM
Posts: 659
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Allan - take a look at: http://tax.ohio.gov/divisions/commun...s/st200804.stm
I've been trying to figure out if it applies to us. At what point could you call work on the plane "maintenance or repair"?
__________________
Andy Compton, PhD EE
RV-10 - #41414 (building)
RV-9A - N643AC (built,flying,sold,missed)
My blood and sweat, the Wifey's tears
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01-26-2010, 12:56 PM
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Join Date: Oct 2008
Location: Fresno, CA
Posts: 479
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California Tax Assosors Office
As an Airport Manager, I will tell you every year the assessor?s office will ask us to provide a list of every tenant and associated aircraft tail number we have located on the field.
They then send each tenant a tax bill for that aircraft. I always know when because they always call complaining to me. Sometimes the person on the hangar lease is not the same one who owns the airplane, but they still get a bill.
Got to love California
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Rick from Fresno
RV-7A
The art to flying lies in learning how to throw yourself at the ground and miss.
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01-26-2010, 01:13 PM
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Join Date: Jan 2006
Location: Cape Coral, Florida
Posts: 259
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Andy,
As I would interpret the article it would be after the airplane is built and you are reparing or maintaining it. So if you had to buy a new engine for the plane it would be exempt from taxes. As I understand Ohio tax law, we are subject to use tax on ANYTHING you buy out of state and use in state. I am looking at the materials used in the construction of said kit. And to me materials are the big ticket items not a few nuts and bolts, but they do all add up.
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01-26-2010, 03:21 PM
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Join Date: Aug 2007
Location: San Antonio, TX
Posts: 193
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You almost gotta be a lawyer here...even in Texas
i quote the Sales and Use Tax Bulletin dated Feb 08 from Texas Comptroller of Public Accounts: "Aircraft and the Texas Sales and Use Tax."
"Exemptions.
No sales and use tax is due if the aircraft is purchased, leased, or rented by a:...
-Flight school or flight instructor.
The FAA recognized school or certified instructor must use the aircraft exclusively for FAA-approved flight instruction." END QUOTE.
i am not sure whether this means the exemption applies to instruction of the flight instructor and owner who uses the aircraft to GIVE instruction - or only to a student who purchases the aircraft to RECEIVE instruction. in my case it won't matter, because when the plane is completed and comes to texas(from my my partner in another state) i am the CFI and my wife is the student, and we both own the aircraft. but i am not sure that if i were NOT instructing my wife (and i really AM, yes, i know it sounds very derring-do) that the tax folks in texas would allow the exemption for my OWN instruction toward say an ATP, as an earlier post suggested. in short, the exemption says the CFI must use the aircraft exclusively for FAA-approved flight instruction; it doesn't say whether that must be for his students or for his own instruction. i don't know the answer, but before assuming the exemption applies to either instructor-owners or student-owners or both i'd check with a tax attorney. the states are hurting and the folks in tax offices are hired to collect taxes, not make liberal interpretations of exemptions for benefit of the populace, unless the populace can prove they qualify. we should probably expect no exemption we cannot prove.
Further and perhaps less-ambiguous exemption qualification might apply under the Occasional Sale paragraph. will research that one and post any possible useful info later.
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