Minnesota - sales tax

[LettersFromFlyoverCountry]

Looking for some information from Minnesota builders. What happens when you register your just-completed project? Do you get a bill from the state for sales tax? For property tax? When? etc. Thanks.

[AlexPeterson]

Bob,

You need to set up a Use Tax account with MN (sales tax). They will probably be nice to you, even though you were supposed to be paying on engine, kits and prop as you purchased them (assuming you bought them out of state and didn't already pay sales tax). Not sure if they require it on anything else besides those items (of course everyone is obligated to pay use tax on every single out of state purchase shipped to their home state, obviously most do not). Although it's been a long time since I did it, I suspect it hasn't changed. Call the MN Revenue and ask to talk to someone in the use tax area.

Need to do this prior to attempting to register...

[LettersFromFlyoverCountry]

Hmmm.... 7% of about $50,000-$55,000. Wife losing job at the end of the month. Guess I'll let this baby sit for awhile.

[Alschief]

Be careful in Missouri they can/will take on penalties and interest.
Ask me how I know

[rvsxer]

Bob,

Sent you a PM...

[LettersFromFlyoverCountry]

Thanks, Mike. I'll be anxious to hear about the process. I tried following things on the Mn. Department of Revenue website but it's very confusing. From what it says, you have to register the aircraft with the MnDOT Aeronautics before paying sales/use tax, which I can't do because it's not an aircraft.

So maybe I'm just supposed to total up everything I've put into the plane (on which tax wasn't paid) and write a check, which is money I really don't have.

But the plane is almost done and maybe now it'll attract a buyer, which it hasn't done since it was first listed, and I can pay the tax bill from the sale proceeds.

[dmaib]

Bob, PM sent.

[Sparky]

Bob, I registered mine with MnDOT in an unairworthy condition with the explanation that I'm still building, and that I'm registering for MN use tax payment purposes only. I also called MnDOT and talked to a very nice lady, who was very helpful. That said, it was painfull to write the check, but I wanted to be proactive. One good thing... the registration fee is waived until the A/C is airworthy.

The aircraft must be registered when airworthy, but if you register the aircraft without submitting use tax payment, you MAY be subject to MnDOT determining how much you owe.

[molson309]

Originally Posted by LettersFromFlyoverCountry

Looking for some information from Minnesota builders. What happens when you register your just-completed project? Do you get a bill from the state for sales tax? For property tax? When? etc. Thanks.

Having just gone through this last year, I can say that MN use tax is due once the aircraft is airworthy. If you register it before this point, no use tax is collected.
This is the way I did it: Registered my N-number a year before I flew, then once I got the inspection done I filled out the MN registration form as airworthy and paid the tax.

Tax at that time was the use (sales) tax calculated on kit, engine, and propeller.

[dougweil]

Hi Bob:

I just finished this process with my RV-7. First I sent in the FAA application for registration and received that back in less than 2 weeks so now N722DW was officially registered with the Feds. Then I went to the MN DOT's website and downloaded the Aircraft Registration Form. You fill that out and you will note on the form that MN wants 6.875% of the cost of the kit, engine, and prop. Fill out the form, write the big check (ouch!) to the Commissioner of Transportation, send it in. A week later I get the bill for the actual aircraft registration ($405). And I see that just as soon as I sent in my sales tax, the state of MN announced a budget surplus!!! As a Wisconsin resident, I was SOOOO glad to help my neighboring state on the road to fiscal health!!!!!