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Illinois Sales/Use Tax Amnesty

bkc3921

Well Known Member
In the last couple of days, I spoke with the Illinois Dept. of Revenue Aviation Tax guru. According to him, builders should have been paying sales/use tax on out of state purchases as they built, but if you are like me, I did not! He suggested that I wait until Jan.1st, as another tax amnesty starts. It runs through October..Anyone who purchased items from 2004-2010 will be able to pay the taxes without any penalties or interest. You may compile the purchases, and list all purchases on one line, on form ST-44, which you may download from the net, from the IDR website. Bottom line: If you need to pay..don't do it now..wait until January to get the exemption. Contact them if you have any questions. YMMV.
 
Excellent post Brian! I paid as I went using ST-44, but I know of a few people that were hit with penalties and fees for not doing so. This is a great thing for Illinois builders who haven't paid along the way!
 
Other states...

I have some friend who built something other than an RV and put close to $250K into it. (Yes it is large and YES it is NICE!)

They did not pay the out of state sales tax as they went a long because North Carolina caps the sales tax on airplanes at $300. So they waited until they had their pink slip and happily paid the $300 maximum.

Check this link for more details.
 
That's because Illinois is has dug themselves a rediculous hole and are trying to scratch every cent out of every citizen they can. Sounds like a load of **** to me. Sales tax on every part you bought out of state?
 
It's that way in most states in my understanding. If you purchase a big ticket item out of state, the state you bought from can report it to the state it went to to collect their missing sales tax, and your state can, and will, come after you for the tax...use tax. It's been in the tax code/law for a long, long time.
 
That's because Illinois is has dug themselves a rediculous hole and are trying to scratch every cent out of every citizen they can. Sounds like a load of **** to me. Sales tax on every part you bought out of state?

In fact they are usually listed as the state in the very worst mess and it is going to get very ugly in the future.
 
Right now I believe everyone is supposed to be filing use tax on all items purchased out of state if the state you live in has a sales tax for that item. This is about impossible to enforce on most transactions, but a registered plane is obvious.

There's legislation being tossed around now to have software added to all businesses to apply the other states sales tax to your purchase that will calculate the total to be added to the transaction. When the business files their sales tax return all the out of state taxes would be included and returned automatically to the various states.

Living in a state with no sales tax will really start paying for itself soon.
 
Right now I believe everyone is supposed to be filing use tax on all items purchased out of state if the state you live in has a sales tax for that item. This is about impossible to enforce on most transactions, but a registered plane is obvious.

Yep...

In many states you should be filing use tax on pretty much everything single thing you buy online. It's just the big stuff like airplanes that can be tracked.
 
Doug...they have been talking about that for over 25 years. Don't hold your breath! States are not good at co-operating. A national sales tax would simplify alot. Don't see THAT coming anytime soon.

Gordon

Recovering CPA
 
I know that Tennessee has a permanent office in L.A. just to audit companies that might be selling online into our state.
In fact they were going around auditing dentists and med docs to see how much they were buying out of state........"bastids"!! :mad:
One friend got knicked several thousand and that was in the '80s when several thousand actually meant something.
 
I know that Tennessee has a permanent office in L.A. just to audit companies that might be selling online into our state.
In fact they were going around auditing dentists and med docs to see how much they were buying out of state........"bastids"!! :mad:
One friend got knicked several thousand and that was in the '80s when several thousand actually meant something.


If I was a TN resident I'd be po'd at this, as I'm sure the money they spend to operate this office far exceeds whatever money the "collect."
 
So if you pay sales tax as you go, can the state then come after you for sales tax on the completed airplane?:(

George
 
So if you pay sales tax as you go, can the state then come after you for sales tax on the completed airplane?:(

George

I know several folks that did get a bill after registration, but they were able to prove that they paid the tax due incrementally during the build. In Ohio, the return doesn't state what you are paying tax on, just that it's due. As long as you have receipts to document what you paid, you should be fine.
 
How does the state figure the sales tax owed if they don't have receipts?

You don't want them to do that! They will look on eBay, Craigs list, Barnstormers, TaP, etc and find the most expensive RV they can and tell you that's what your plane is worth. Then the onus is on you to try to get the value down to reality. Best to be proactive and keep your kit receipts.
 
Tax issues

I wonder If there is a differance tax-wise if you pick-up your kit in person and haul it home yourself vs. the kit being "sold" to an individual located in a taxing state. They dont usally tax everything you own when you move into these states or do they? hmm Russ
 
Use vs. Sales

As I understand it, here in Illinois, the "Use Tax" is based on the fair market value..where the "Sales Tax" is only on the cost of material..(better!)...So, everyone needs to check to see what their state requires...Forgot to mention this earlier..but the Tax Guru said that freight charges need not be included on the ST-44 as taxable, but crating charges DO..as they are part of the cost of doing business (I guess its a fine line)...
 
Be careful... in Indiana I inquired about paying as I built (8 years ago) and was told by the agent in the DOR aviation office that they had no way to track that you paid for the aircraft parts. I was basically told that if I paid as I went, then I'd probably be asked to pay again when it was registered.

So, I paid ONCE when I registered the bird.

I guess I'm saying that if you pay as you go, be danged sure that you can prove what you paid for.

And what if you move to another state during construction? Ugh.......

YMMV
 
I got a reply from the state of MN yesterday saying to pay the sales tax along the way and keep receipts. The tax at registration will be based on actual items purchased price rather than perceived value.
 
I got a reply from the state of MN yesterday saying to pay the sales tax along the way and keep receipts. The tax at registration will be based on actual items purchased price rather than perceived value.

That's exactly what I did here in IL, and it worked just fine.:cool:
 
Moving

If you change states in the course of building, there may be exemptions...

9. Tangible personal property brought into Arizona by
an individual who was a nonresident at the time the
property was purchased for his own storage, use or
consumption if the first actual use or consumption
of the property was outside the state, unless such
property is used in conducting a business in
Arizona.


Also, in AZ casual sales from out of state (i.e. not from a dealer/manufacturer) do not pay a Use Tax.

Check your states rules carefully.
 
So how much tax does this equate to for say, an $80K plane? Guess I didn't know it existed (not a tax genius). I'm still in the cost estimating part of starting to build (I hope they can't tax my thoughts, I'm already beat down enough :D )

IL res.
 
Il Tax (P.S....Roger Moore was the WORST Bond..)

The Il sales tax is .0625%......For 80k, the tax is 5k even. Remember, you only have to pay on the materials purchased out of state, not the fair market value, or what you think it is "worth"...I'm about to finish mine after 10 years of building, and with all the blood, sweat, and tears, I wouldn't take a million for it..but I'm **** sure not going to pay taxes on a million!
 
use tax

In Illinois, you will only have to pay the use tax on any items that you bought "NEW" from out of state on or after June 2004. Anything bought "USED" or from an individual prior to June 2004 is not subject to the use tax. I was asked to pay for a previous project that built, Once I proved that I purchased the project from someone else prior to the June 2004, everything was dropped.
 
Got on the ILL Dept of Rev and educated myself. When the thread originally posted (I just skimmed the topic) I was originally thinking of this more as a personal property tax like I believe MO has for cars etc... not a sales tax. This is probably a good thread to bring up.
 
For all you Illinois residents, here's an article that describes the extension of the tax amnesty through 2011. The new tidbit I learned is that when you send in your Form ST-44, you should write the word "Amnesty" in red ink across the top of the form. (This will, I suppose, get your return placed in the "good boy/good girl" pile.)

In case there's any doubt about Illinois' tenacious tax bureaucracy, a friend of mine who bought a Glasair III out of state was sent a letter within a month of his airplane's arrival in the state. A tax guy apparently saw his N-number at a fly-in, looked up the registration number and saw he hadn't paid his 6.25%, and sent him a bill. They are also known to scan the FAA registration database and correlate your homebuilt's new N-number with your tax records.

Aw, rats. I've been told I should not discuss Illinois taxes, because it makes veins stand out on my temples. So I guess I'd better go take a look in the mirror and chill out for a while... :rolleyes:
 
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Buck hows that 66% shove in state income taxes make you feel?

My brother in-law is about to pack up the family and move to Florida. Pretty substantial chunk of chance when you're making 200K+.
 
tax confusion

Unfortunately that saves nothing if you live out of Oregon. It's your home state that will come after you.

Wait a second. If you physically go to Vans in Oregon and pay no sales tax and take receipt of goods (let me mention our state income tax of 9% provided you make more than $7k yes $7k/yr) the state in which you reside wants the sales tax? eh hum...for what? If I take a trip to IL to see family and want to by a t-shirt or say go to Wicks for more expensive stuff, they certainly will look at me weird if I say "oh, I live in OR so not tax for me!?.

How does that work?

Ryan
 
Wait a second. If you physically go to Vans in Oregon and pay no sales tax and take receipt of goods (let me mention our state income tax of 9% provided you make more than $7k yes $7k/yr) the state in which you reside wants the sales tax? eh hum...for what? ... How does that work?

Yep, it's the Astonishing Fact of the Day: Part of Illinois' sales tax is actually a "Use Tax" on goods purchased ANYWHERE. It doesn't matter whether the state where you bought it has a sales tax or not. If you bring it into Illinois, you're supposed to send in 6.25% of the purchase price (plus any local or city taxes). That also includes internet purchases, obviously.

If I were to buy an item in a state with only a 5% sales tax, Illinois wants the difference, 1.25%. (Note, however, that they will not refund the difference if I bought an item in a higher-tax state...)

If you consume it or use it in Illinois, they want money from you. Strange how they can't seem to keep track of all that money, and how they're arguably in the worst financial condition of all the states...

Uh oh, don't get me started again...
 
Buck if you're so pissed, why not vote with your feet and move? Lots of states out there that aren't sticking it to their citizens. I'm not a big fan of Texas but look at their finances. Companies can't move out of places like CA fast enough.
 
if you're so pissed, why not vote with your feet and move?

Don't think we haven't disucussed it on many occasions. I'm actually moving one of my businesses across the border to Wisconsin next week. The other one is more problematic, but I'm working on it.

I live in an aviation paradise, so moving myself is gonna be tough. I left Texas 10 years ago and actually moved here voluntarily. Everything I have is now here. Many good friends are here. My flying gigs are here. It's tough to say goodbye to all that. But every day, it's getting easier to contemplate leaving. :rolleyes:
 
I have some friend who built something other than an RV and put close to $250K into it. (Yes it is large and YES it is NICE!)

They did not pay the out of state sales tax as they went a long because North Carolina caps the sales tax on airplanes at $300. So they waited until they had their pink slip and happily paid the $300 maximum.

Check this link for more details.

I don't know where this organization got its $300 figure from but it's wrong. The maximum sales tax in NC for an aircraft is $1500 (I know... I've paid it twice in the last 2 years! ;)) Still it's a VERY reasonable amount, although we do have to pay an annual personal property tax on the aircraft here.

See the actual NC sales tax form for aircraft here.

Best regards,
 
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