Sales tax on a "gifted" kit

[nippaero]

I am finishing an early RV-6 that was started by my grandfather. He purchased the kit back in '92. The total price back then was somewhere around $9000 from Vans (including the finishing kit!)

My question is when I get the plane registered, how would the state typically calculate the sales tax since this plane was no cost to me? I am in Idaho.

I am wondering if I should have him write out a bill of sale to me for some dollar mount or would they go off the original purchase price he paid.

Any ideas?

[ChiefPilot]

You'd really need someone from Idaho to provide an answer for your situation since I suspect it varies widely from state to state.

In Minnesota, it was based off the cost of the kit+engine+prop. Avionics were not requested to be included and I didn't volunteer to do so :-)

[krwalsh]

Originally Posted by nippaero

I am finishing an early RV-6 that was started by my grandfather. He purchased the kit back in '92.

I would also look into the statute of limitations for the state you live in. A kit from '92 is almost certainly beyond that.

[BobTurner]

Get a bill of sale, even if it says $0. Also a written statement from your grandfather saying that no for hire assistance was used. You'll need those things to register the plane when finished.
In most states your grandfather owes sales tax, not you, if it was a gift. Statute of limitations may have passed.

[nippaero]

I spoke to the Idaho Tax Commission today and they said as long as we fill out a sales tax exemption/transfer affidavit showing that it was gifted then I will not owe sales tax on the kit. Only the things I purchase myself from this point forward. So that was great news

On the statute of limitations here is what they had to say.

"Yes, Idaho has a 7 year statute of limitations (for persons not holding an Idaho sellers permit) and that would apply to your grandfather’s purchase in 1992. However, sales tax is a transaction tax. Thus each time a transaction occurs Idaho tax is due unless an exemption applies. Your acquisition of the kit from your grandfather in 2015 is a separate potentially taxable transaction except that it is exempt via the gift exemption."