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pmnewlon

Well Known Member
After owning my airplane for almost three years now, I got a 'friendly' letter from the Ohio Department of Taxation. I am guessing that a 2012 change in tail number prompted the inquiry. Regardless, the letter and form they sent to me gives no indication that I needed to investigate further the purchase type (casual sale), just that I needed to document the purchase price, disclose where it is kept (they already know that from the registration), and calculate how much sales tax I owe them.

The end of the letter states that if I voluntarily submit the tax immediately they would waive interest and penalties. If I didn't know better, I would assume that the sale was subject to sales tax and send them several thousand dollars. Instead, I called their office (went through 'press one for, press three for, press nine for, press....) and spoke to 'Marcy'. She readily confirmed the casual sale and suggested I write the department a letter.

My hangar-mate got the same letter, he told them he inherited his airplane from his father. They didn't believe him so made him get a bill of sale from his father - which he did, stating the sale was for $1.00. He then sent them 100% tax (a nice crisp $1 bill) and asked that they dismiss the matter. They sent his dollar back and said he didn't owe any tax.

I wonder how many people in Ohio will simply send them a check? I can't wait to see where this goes next.

http://www.tax.ohio.gov/sales_and_u...d/3095/QuestionID/433/AFMID/9887/Default.aspx

Exempt: Casual sales except sales of motor vehicles, boats and outboard motors that are required to be titled, snowmobiles, documented boats, all-purpose vehicles, off-highway motorcycles and personal watercraft.
 
Use caution buying if a broker is involved.

A friend here in AZ got hit with a use tax - 2years after the sale - because his paperwork showed the seller as a broker, and the state did not classify it as a casual sale.

If you use a broker, try and get the previous owners name on the paperwork, not the brokers.

I'm sure the above is probably true in most states that exempt casual sales from use tax.
 
That's a standard form letter they send when there is a registration change. I went through a similar fire drill with my kit. They also don't care if its airworthy, so if you register your kit early in Ohio, be prepared to pay sales tax and the $15/seat use tax.

I had been paying my sales tax annually and declaring it on my return. It was a little painful in that I had to provide a state agency a copy of the state form I sent the state to prove that I had already paid the sales tax. They also requested copies of all my purchase invoices. I compiled and the issue was quickly resolved.
 
> OK, so to clarify, yours was a casual sale of an untitled motor vehicle, therefore tax exempt?

That is my understanding, yes. Any business related purchase would be subject to tax though. (So if I bought a 172, put it in an LLC and rented it out through a flight club, I would assume it would be a taxable sale even if it fit the 'casual sale' of owner to buyer.)
 
pmnewlon said:
> OK, so to clarify, yours was a casual sale of an untitled motor vehicle, therefore tax exempt?

That is my understanding, yes. Any business related purchase would be subject to tax though. (So if I bought a 172, put it in an LLC and rented it out through a flight club, I would assume it would be a taxable sale even if it fit the 'casual sale' of owner to buyer.)
Click to expand...

In Texas, a "casual sale" is between individuals only. If you sell to an LLC, that is not considered an individual.
 
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