Taxes are due after registration

So far the only thing I've done is call the tax department and ask them about tax on a homebuilt that is purchased in stages over several years. The answer was that no tax is due on a homebuilt until it is registered as an aircraft. Then the regular tax rate is applied to the total purchase price as substantiated by receipts.

The person I talked to with the state tax department was helpful and informative. Call them if you have questions...I don't think they'll bite.
 
It has to be an aircraft to be taxed as such

The Virginia Tax Administrative Code Section 23VAC10-220-10 includes the following example:

"Example 3: C purchased a plane kit in Virginia on June 1, 1982... When the kit is assembled, and qualifies as an aircraft, it is subject to the 2.0% aircraft sales and use tax on the assembled cost."

I think the point is that the state can levy an Aircraft Sales and Use Tax only on an aircraft. Your kit is not an aircraft until you build it and register it as one.
 
This info is good, but only part of the whole story.

After working a year on my project, I moved to Virginia. The publicly-owned airport where I had rented a hangar required an N-number prior to to renting me a hangar, where I completed the last 50% of work prior to flying.

During the first week in January, Virginia airport managers must give an annual report to the state of the aircraft based at their airport including owner, type of aircraft and N number. This information is forwarded to the counties.

You can easily guess what happened next. The county levied its annual property tax based on a blue book value of $50,000 as if it were a completed airplane. So then I got to lose valuable building time trooping down the county building and giving them an education on the need for an airworthiness certificate to exist before all the parts can legally become an airplane. I did get the $1000 bill reduced to $100.

Notice that I said the county levied the tax. It turns out that the state levies a sales/use tax one time on the items purchased, but that county ANNUALLY levies a 2% property tax on the plane's value.

The rate varies by county.

So, in Virginia, you pay and get to keep paying.

In other states, e.g. Ohio, Tennessee and Pennsylvania, you only pay the sales/use tax, not the annual property tax.
 
Like you said, it depends on the county. Prince William County where I live does not tax aircraft.
 
anyone know about St. Mary's county in MD?

Does anyone have similar info for St. Mary's county in MD? I'm moving to there soon and will be completing my RV-8 (already have N-number).
I'll call the tax offices soon.
 
Jim, the way the Maryland Sales/Use Tax works is that when you register your plane, the FAA notifies the state, and about 3-6 months later you'll get a letter from the State of Maryland Comptroller. It'll say "we see that you have a new plane, we value it as XXX, and you owe us $YYY. Typically they way overvalue the airplane. For example, I've had them tell me my 40 year old steel tube, wood and fabric glider I bought for $6000 is worth $92,000.

You just send them a letter justifying what the real value is and a check for 6percent of it and that's the end of it. Fortunately in Maryland it's only a one time deal, not an annual thing.
 
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