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03-13-2011, 07:28 PM
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Join Date: Jan 2008
Location: Ashland, OR
Posts: 2,574
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Use tax and property tax
If you buy the kit out of state, like perhaps from Oregon, you will pay use tax (sales tax) as part of the final sales tax on your stated cost of building the airplane. Usually, when you register it, you will get a form to tell them how much you spent. You can adjust that for purchases that were in-state and already taxed (like anything from ACS). What I did was pay the sales tax on each of the major components in the year I bought them on my CA 540 income tax form (there's a place to do it). This was pretty convenient, and apparently it was obvious to the state board of equalization that that is what I did, because they didn't even bother to ask me about it when I registered the airplane.
Property tax is paid to the county, and won't start until you have a completed airplane, parked somewhere like an airport on the official tax assessment date ( I think it is March 1 in my county). You will get a form from the county asking you to supply information that will help them assess the value.
__________________
Steve Smith
Aeronautical Engineer
RV-8 N825RV
IO-360 A1A
WW 200RV
"The Magic Carpet"
Hobbs 625
LS6-15/18W sailplane SOLD
bought my old LS6-A back!! 
VAF donation Jan 2020
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03-13-2011, 07:45 PM
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Join Date: Aug 2006
Location: santa barbara, CA
Posts: 1,682
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There are two separate taxes that you are subject to in CA. The use tax is essentially a sales tax - a one-time tax based on the purchase price. Some folks opt to pay this as they go; that is, pay incrementally as they buy the kit in stages. Others have taken a wait and see approach, waiting for the state to send them a bill. My understanding is that there is a 2 year statute of limitations on this during which the state must request payment.
The county in which the plane is based will want to collect property tax every year based on what they feel is the value of the plane. Hope for the best on this, and be prepared to fight their assessed value if it is out of line. In Santa Barbara county, they also send out a form every year asking you what new equipment has been installed in the plane, so that they can adjust the vale accordingly.
Hope this helps
Erich
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03-13-2011, 08:37 PM
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Join Date: Mar 2008
Location: Ramona, CA
Posts: 2,370
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Last year I paid the use tax on the tail and wing kits on my CA540. According to the information on the Board of Equalization web site you can pay them directly by 1/31, or pay on your CA540 by 4/15. Sometime around May, I get a check from the State basically refunding me the Use Tax amount. A month later I get a letter from the BofE stating that my Use Tax never got paid, and they dinged me for interest and a late fee. Stupid government agencies! The two agencies did not follow the letter of the rules they plainly state on their public information sites. Long story short, I paid the use tax late, along with the penalty. This year I paid the BofE directly before 1/31 on the use tax for the fuselage.
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03-14-2011, 03:47 PM
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Join Date: Aug 2007
Location: Wichita Falls, TX
Posts: 2,182
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Does California hit out-of-state purchasers of kit pieces/projects with any sales/use taxes?
For example, I'm in Texas, and might wish to buy a substantially complete, 2nd-hand RV project (but still very far from a complete aircraft, and no FAA paperwork begun yet) from someone who lives in, and has the project in California, and take it back to Texas... will the State of CA try to levy any taxes on me for it?
__________________
Neal Howard
Airplaneless once again...
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03-14-2011, 06:56 PM
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Join Date: Aug 2006
Location: santa barbara, CA
Posts: 1,682
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Nah, you should be safe from California. Don't know about Texas though.
Erich
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03-14-2011, 09:15 PM
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Join Date: Aug 2007
Location: Wichita Falls, TX
Posts: 2,182
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I know that Texas will hit me up for use tax once a completed aircraft is finally registered with the FAA. On the other hand, if I buy an already complete/registered airplane in Texas, and it's being sold by an individual that qualifies as an "occasional sale" then it's exempt completely from Texas sales/use tax. 
__________________
Neal Howard
Airplaneless once again...
Last edited by Neal@F14 : 03-14-2011 at 09:20 PM.
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03-15-2011, 10:22 AM
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Join Date: Aug 2006
Location: Kansas City, Mo
Posts: 11
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Quote:
Originally Posted by Neal@F14
I know that Texas will hit me up for use tax once a completed aircraft is finally registered with the FAA. On the other hand, if I buy an already complete/registered airplane in Texas, and it's being sold by an individual that qualifies as an "occasional sale" then it's exempt completely from Texas sales/use tax. 
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It sounds like Texas is one of the few better places to live. They don't try to confiscate all of your money.
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03-15-2011, 10:36 AM
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Join Date: Nov 2006
Location: Westport, MA
Posts: 27
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No sales tax on aircraft in MA. One of the few things they don't tax.
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Rob Enos
Westport, MA
RV7A N155RE (finish)
RV4 N97RT (sold)
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03-15-2011, 04:03 PM
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Join Date: Dec 2010
Location: Jacksonville, FL
Posts: 219
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Neal, has the seller of the RV project paid any incremental sales tax on the kits already purchased? If so, be sure to check directly with your local taxing authority on how they assess use tax. In many states, credit is awarded on tax already paid for tangible personal property, even if to another state. But you'll need his records to prove payment...
Jack
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04-06-2011, 01:27 PM
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Join Date: Jun 2005
Location: SoCal
Posts: 2,452
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Verified; you have to pay taxes on your RV in California!
This topic has been discussed on the forums before however; I never saw a definitive answer. I actually received a PM asking if I paid taxes on my new plane from a fellow VAF member. A week later he told me he did not have to pay. Well, it took a few months but California found me. I received form BOE-1169-P (S1F) Rev (6-10) from the State Board of Equalization Consumer Use Tax Section. I just paid almost 9% of my aircraft purchase price in taxes. They required that a Bill of Sale be included with the payment. So, if the plane will be in CA for longer than 6 months, you owe CA taxes. If you paid taxes in another state, you may owe CA the difference if your county has a higher tax percentage than the other state were you paid your original taxes. I hope this post helps someone in the future.
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Axel
RV-4 fastback thread and Pics
VAF 2020 paid VAF 704
The information that I post is just that; information and my own personal experiences. You need to weight out the pros and cons and make up your own mind/decisions. The pictures posted may not show the final stage or configuration. Build at your own risk.
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