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  #1  
Old 02-16-2021, 07:59 AM
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BobbyLucas BobbyLucas is offline
 
Join Date: Oct 2019
Location: Belleville, MI
Posts: 297
Question Michigan Builders - Use Tax

(Please, pretty please, only reply if you have information specific to Michigan, or can point me to someone who does)

Michigan builders: Did you pay-as-you-go for use tax on your kits, or pay the lump sum right before/after registering? Looking for advice and details of the process for each. My situation follows...

I bought my first kit in 2019 and wanted to pay as I went, so on my MI-1040, using TaxAct online, I claimed the empennage kit and paid the use tax. Fast-forward to this year, I'm starting to prepare my taxes and planned to claim the fuse and finish kits, but... Looking at last years return, both my paper copy and online, I cannot see any detail about what the use tax I paid was for. I'm sure I recall entering a description that it was for the empennage kit and adding my builder number, but looking now I don't even see anywhere to put that information - I only see fields for total dollar amount of all purchases?? Did I miss a form somewhere?

Of course I can't get anyone on the phone from MI department of treasury, or even TaxAct. smh

Am I better off waiting until registration to pay the use tax? Might have to kiss last years payment goodbye, bin it to cost of education.
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Bobby Steinmetz
Van Buren TWP, MI
Student Pilot, Mechanical Engineer
RV-12iS Empennage, Fuse, Finish, & Avionics Kits #121228
N781PT Reserved
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  #2  
Old 02-16-2021, 08:23 AM
RV10Pilot RV10Pilot is offline
 
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Location: Medford, NJ USA
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Quote:
Originally Posted by BobbyLucas View Post
(Please, pretty please, only reply if you have information specific to Michigan, or can point me to someone who does
I am not very good at following instructions, since I paid my use tax in New Jersey as I built. But I do use TaxAct

Often TaxAct will ask for information that is for your records and not reported to the federal or state tax agency. If you filed electronically you should have a pdf of what was submitted. My guess is that it does not ask for a description of what the use tax is for, but rather just a total.
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  #3  
Old 02-16-2021, 08:41 AM
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BobbyLucas BobbyLucas is offline
 
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Quote:
Originally Posted by RV10Pilot View Post
I am not very good at following instructions, since I paid my use tax in New Jersey as I built. But I do use TaxAct
I'll allow it.

Quote:
Originally Posted by RV10Pilot View Post
Often TaxAct will ask for information that is for your records and not reported to the federal or state tax agency. If you filed electronically you should have a pdf of what was submitted.
I was thinking the same thing, but I could not find the information anywhere in my TaxAct account online, or the paper copy in my file, or the downloaded pdf.

What's worse, from the total I paid, I clearly claimed more than just the empennage kit, but I can't recall what it would have been. (EDIT: Luckily figured out it was the down-payment for the fuse kit)
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Bobby Steinmetz
Van Buren TWP, MI
Student Pilot, Mechanical Engineer
RV-12iS Empennage, Fuse, Finish, & Avionics Kits #121228
N781PT Reserved

Last edited by BobbyLucas : 02-16-2021 at 12:18 PM.
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  #4  
Old 02-16-2021, 09:46 AM
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Greenley Greenley is offline
 
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If you can still bring up last years return you should be able to bring up the schedule and print a copy. I did that each time I bought a kit. When I got my air worthiness I wrote up a cost justification showing the kit sections, and that I had paid taxes already on that, had purchased a used engine and over hauled it myself so no taxes, and the main invoice from stein. I sent them that documentation along with a check for the taxes on the avionics and they were happy. If I had waited to hear from them I would have had to talk them down from the much higher number they would have come up. I feel that being proactive saved a lot of money. Oh, and this was for Michigan.
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  #5  
Old 02-16-2021, 10:37 AM
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BobbyLucas BobbyLucas is offline
 
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Quote:
Originally Posted by Greenley View Post
If you can still bring up last years return you should be able to bring up the schedule and print a copy. I did that each time I bought a kit. When I got my air worthiness I wrote up a cost justification showing the kit sections, and that I had paid taxes already on that, had purchased a used engine and over hauled it myself so no taxes, and the main invoice from stein. I sent them that documentation along with a check for the taxes on the avionics and they were happy. If I had waited to hear from them I would have had to talk them down from the much higher number they would have come up. I feel that being proactive saved a lot of money. Oh, and this was for Michigan.
Do you know which schedule specifically? The 1040 itself does not have any fields that I can see to describe what it is you're paying the use-tax for, it only says how much tax you paid. Does your tax return actually say "RV-10 Kit" on it somewhere?
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Van Buren TWP, MI
Student Pilot, Mechanical Engineer
RV-12iS Empennage, Fuse, Finish, & Avionics Kits #121228
N781PT Reserved
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  #6  
Old 02-16-2021, 10:57 AM
odens_14 odens_14 is offline
 
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No help with tax act or Michigan but wanted to point out that Van's has started charging sales tax in many states and it looks like Michigan is on the list. Verify you weren't taxed on kits purchased in 2020 so you're not paying twice.

https://www.vansaircraft.com/2020/01...ecific-states/
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  #7  
Old 02-16-2021, 11:07 AM
Brian Perry Brian Perry is offline
 
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Location: Saginaw, Michigan
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I completed my 14A recently. I registered with the FAA in October and I think that prompted Michigan to send me a request to pay the tax. I received the request to pay the use tax in January. They did not request any specific amount. I did not pay any sales tax on any of the kits but they were delivered in 2018-early 2020. I did pay sales tax on the Thunderbolt engine that I bought through Van's which was delivered in July 2020. I decided to wait until completion and do it all at once for simplicity's sake.
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Last edited by Brian Perry : 02-16-2021 at 11:09 AM. Reason: clarity
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  #8  
Old 02-16-2021, 11:25 AM
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Keep good records of everything you bought and separate those receipts by what you did and did not pay MI taxes on. When I built my RV-10, pretty much everything I purchased did not include any MI sales tax, so when it came time to register the plane, I made copies of the receipts, a completed MI tax form, and forwarded those, along with a big $$$ check to the MI department of treasury. I paid no penalty. Remember when it comes to taxes: report what you have to and claim whatever deduction you can. There is no good reason to pay more than you are legally required to.
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  #9  
Old 02-16-2021, 11:32 AM
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BobbyLucas BobbyLucas is offline
 
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Quote:
Originally Posted by 9GT View Post
Keep good records of everything you bought and separate those receipts by what you did and did not pay MI taxes on. When I built my RV-10, pretty much everything I purchased did not include any MI sales tax, so when it came time to register the plane, I made copies of the receipts, a completed MI tax form, and forwarded those, along with a big $$$ check to the MI department of treasury. I paid no penalty. Remember when it comes to taxes: report what you have to and claim whatever deduction you can. There is no good reason to pay more than you are legally required to.
Luckily it's a bit simpler with an RV-12; everything but paint is included in the kits from Van's. Which tax form are you referring to?
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Bobby Steinmetz
Van Buren TWP, MI
Student Pilot, Mechanical Engineer
RV-12iS Empennage, Fuse, Finish, & Avionics Kits #121228
N781PT Reserved
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  #10  
Old 02-16-2021, 12:13 PM
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BobbyLucas BobbyLucas is offline
 
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I should buy a lottery ticket... Both TaxAct and the MI treasury called me back!

TaxAct was of no use, although the nice lady, Bobbie, certainly tried. Honestly I think they changed their software and the line-item detail I entered about the use tax I paid for 2019 was lost. Anyway, I finally figured out that the two items I included were the empennage kit and the down payment for the fuse kit.

The gent I spoke to at the treasury made it sound pretty loosey-goosey tbh. He said that if a build takes many years to complete they would prefer you pay as you go, but if you complete it, "in a year as an example," then you can wait until completion. When I told him I paid some use-tax on a kit last year, but my tax return didn't show that it was towards the plane, he said no problem - as long as you can show you paid enough use tax to cover the purchases made as evidenced by invoices/receipts, you'll be fine. He actually said at that point it would be up to the treasury department to prove that the tax you paid wasn't for the plane. Of course I have none of this in writing.
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Van Buren TWP, MI
Student Pilot, Mechanical Engineer
RV-12iS Empennage, Fuse, Finish, & Avionics Kits #121228
N781PT Reserved
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