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Federal and State Income Tax Deductions

MartySantic

Well Known Member
You guys that have recently had to pay a registration fee and/or a sales tax/use tax on your RV-12 kits may want to look at this. For that matter, any of the kits.

Per a conversation with a guy at the Iowa Department of Revenue.

The sales tax/use tax ($3552 for me, 6% of my cost for the kits) is DEDUCTIBLE on the federal form per the instructions on Page A-5 and Page A-6 in the Form 1040 INSTRUCTIONS booklet and the calculation of the backside of Schedule A. We are limited to the 1st $49,500. So for myself, $2970 (6% of $49,500) is deductible on Line 7 of the FEDERAL Schedule A.

In Iowa, may be/will be different in other states. The sales/use tax, at the moment is NOT deductible on the IOWA Schedule A. The IA tax rep, indicated there is currently a bill before the IOWA legislature to get the IOWA tax law in line with the federal tax law. He expects this to happen in the next few weeks. If passed by the Iowa legislature the sales/use tax we paid will be deductible of the IOWA Schedule A. Such is specifically prohibited right now if you look at Iowa's Schedule A, Line 6.

Take this for what it is worth. I am certainly NOT a tax attorney or expert. If you get some other advice from your tax guy, let me know!! I certainly do not want to be an outlier.

LATE ADD.....My CPA does NOT agree with the the guy at the Iowa Department of Revenue. SO, more research is needed.
 
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State Tax on RV-12

Years ago Colorado tried to lure United Airlines to construct their major aircraft overhaul base here. United was reluctant, since they would have to pay state sales taxes on everything needed, like parts, fluids, etc, so the State Legislature passed a bill exempting aircraft parts from sales taxes in the state. That must have been 15-years or more ago.

When I registered my RV-6A the state didn't bother me for taxes.
When I registered my RV-12 they wanted sales taxes on the value of the plane.

I reminded them of the sales tax exemption and provided about 100 pages of every invoice I received from Vans, Aircraft Spruce, etc, as well as photos of the construction progress, and an offer of over 12 sworn affidavids of people who witnessed me building the plane from parts I purchased.

The package weighed over a pound when I mailed it in.

They backed off and I paid NO tax. It pays to fight "City Hall."
 
LATE ADD.....My CPA does NOT agree with the the guy at the Iowa Department of Revenue. SO, more research is needed. If I get a GOOD interpretation I will post the results!!
 
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