Be careful in Maine

[flyeyes]

There is a long thread right now on the Cirrus list about tax collection in Maine.

A Cirrus owner who lives in Massachusetts bought a new Cirrus in Duluth, MN several years ago. The owner lives, works, and has the aircraft registered in MA, which apparently has a sales tax exemption for aircraft.

The problem for him is that he vacations in Maine. The state government used IFR flight records to determine that he traveled in Maine, and is billing him for "use tax" amounting to 5% of the value of the aircraft, plus several years of interest at 12%. The total bill is over $26,000, not including the $5k he has in legal fees to date.

The rules are somewhat arbitrary, but in 2005 they decided to go after people who bought aircraft in states with no sales tax (like Oregon), and who spend at least part of 20 days in Maine in 12 months. They apparently have decided to apply it retroactively to 2000 or so, and are going after aircraft owners who haven't paid a use or sales tax, even if they aren't Maine residents.

I have certainly flown to Maine for vacation in the past (I added up almost 100 days I have spent in Maine in my lifetime, traveling by private plane) but fortunately not since 2000. I suspect that many pilots in the Northeast would spend a lot of time there.

It seems to me that this is terrible policy, and it certainly makes me wary of traveling to Maine again. If any listers are Maine residents or frequent visitors, it might be worth a note to a legislator.

[smoore]

This sets a horrible precedent. Are they going to send me a tax bill if I drive my car into Maine?

Do we have the whole story here, is the person in question a Maine resident? If not I don't see how any use tax could apply.

[Captain_John]

This IS a horrible precedent! I hadn't heard anything of it before.

I used to snowmobile in Maine and I can remember a tax scheme they had concocted whereas if you paid 5% MA sales tax and used your sled in Maine, you owed the state of Maine the 2% balance. That disappeared and they no longer do it anymore.

BTW, the MA aviation tax exemption is likely to end, so if you are interested in benefiting from it, you best do it soon!

Check out the Massachusetts Aeronautics Commission website for information.

CJ

[the_other_dougreeves]

Lovely. Looks like this is 36 M.R.S.A. ?1760, sub-?45:

An aircraft purchased and used outside of Maine but subsequently used in Maine will be exempt from use tax provided the aircraft is not present in Maine for more than 20 days during the 12 months following its purchase. Any time during which the aircraft is present in Maine for major alterations, major repairs or preventive maintenance is not counted against those 20 days.

Note that this applies only for the first 12 months after purchase (at least it does for the moment ... tax man always finds ways to get paid)

Solution #1 - Don't file IFR in Maine so it's harder to track you (way to encourage safety, guys!)

Solution #2 - Don't stay for more than 19 days

Solution #3 - Tell the Government of Maine to stuff it and go vacation in Oregon. They have less snow and your RV likes being back "home" better anyway.

TODR

[flyeyes]

Originally Posted by the_other_dougreeves

(snip)
Solution #1 - Don't file IFR in Maine so it's harder to track you (way to encourage safety, guys!)

Solution #2 - Don't stay for more than 19 days
(snip)
TODR

A problem with the definition is that any portion of a day is considered a whole day. So if you lived in Massachusetts or Vermont and practiced IFR approaches at Maine airport every other weekend through the first year to get familiar with your new plane, you're hosed.

One weekend in Bar Harbor and a few fly-in breakfasts would be enough to put you over the edge for that matter...

[rvator9a]

If you think that tax is bad you should try living here, I'm sure if they can think of a way to tax the air we breathe they will try to get that passed also. It says vacationland on our license plates but it should read taxationland.

[Steve A]

Just a small plug. I live in Louisiana and basically we have the same weather as Florida. I live in Lafayette, a progressive college town in the southern part of the state. We are inland enough to avoid major hurricane damage. We are ranked one of the lowest states for taxes. We have a state income tax unlike Florida and Texas but both of those states have much higher property taxes.

We have very mild winters, today it is in the 70's and although our summers are very hot and humid, you can still fly in the morning.

Just a plug. I grew up in Colorado but would not live there, too crowded, too expensive, too californicated.

[the_other_dougreeves]

Update: The Maine Revenue folks must have gotten word that pilots were "curious" about their new policy. AOPA carried this clarification today:

Thanks to numerous pilots' calls to the Maine Revenue Service, the department has clarified its use-tax policy on out-of-state aircraft. Changes to the state's tax law went into effect Jan. 1, 2007. During the first 12 months after an aircraft is purchased in a state without a sales tax, the current use tax will only be assessed on that aircraft if it is in Maine for more than 20 days, cxcluding time for maintenance.

So there you go.

TODR

[allbee]

I guess you are just going to have to fly VFR into Maine from now on, plus don't file a flight plan. I suppose turning off your flashers and painting the plane white and making sure you have the small numbers might help also.

[WildBill]

Who knows how far up the food chain they get their IFR data from, but maybe those that fly to maine often could try something like this:

http://web.nbaa.org/public/ops/asdi/form.php
Block Aircraft Registration Request (BARR)

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I think ADS-B and/or Mode-S will be the end for privacy of this kind of transportation as there are already some home receiver "projects" around.