All you guys on the left coast building planes, this may concern you.
Bulent


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From: "lgjohnsonus" <lgjohnson@adelphia.net>
Date: Thu, 06 Jan 2005 01:44:05 -0000
To: canard-aviators@yahoogroups.com
Subject: [c-a] Orange County CA Cozy Tax Nightmare



This is kinda long- it's about taxes in Orange County, CA on
my Cozy MKIV. It's relevant to anyone in OC, and may soon be relevant
to everyone in CA, given the tax assessors are now sharing data.
Basically, OC has just assessed me $90,000 for recreational labor.
Read on, or skip...

Some of you might remember my tussle with the O.C. CA Tax Assessor in
2003. They wanted to assess my plans-made, homebuilt airplane at
$250,000! They agreed to reassess it at $37,400 (35K plus sales tax)
after I presented a prior appraisal performed by Dick Ruttan showing
that as the actual value. Well, they just changed their minds again.
They have just valued it for 2005 at over $140,000. This despite
knowing it was in a hard landing, after seeing proof of an insurance
claim, being told that it is still disassembled in my hangar as
it has been for more than a year, and knowing that this is far above
market value for a perfect, flying airplane.

The assessment goes like this: they figure the materials at $40,000
(today's market). They are then assessing the value of all the
labor for the time it took to build, a total of a little over
$90,000. They are supporting this estimate with the info on the
official Cozy website on the time it takes to build, while ignoring
the stuff on the cost of materials. Then, they add sales tax to the
total. This is called cost-based assessment. It could apply to any
hobby, art, or what have you. It is not based on market value, in
other words. So, when you retire (or if you're retired already) spend
all day polishing your car for 10 years and it will be worth several
million dollars.

They completely ignore their previous assessment, Dick's
appraisal, the damage history, and that the plane is not even flying.
If they pull this off it may spread through the rest of California
like wildfire, and anyone with a productive hobby will all have to
flee the state. They did this a few weeks ago, but waited until today
(Jan 5) to spring it on me, so I'd be legally bound to the 2005
taxyear. The woman on the phone told me so- can you believe that?
When I told her I'd fight it, she threatened to reassess back to
2003 as well.

Anyway, I know of no other experimental anywhere in the country that
has been assessed this way. This is close to a 4 fold increase. It
makes you wonder- do these folks have any clue what this looks like?
250K to 37K to 140K? Is anyone going to believe them, given they
can't give a single corroborating example? This is a brand new
form of taxation.

Help me out here, guys. I need some ammunition. We desperately need
to get government at all levels involved to nip this in the bud, or
California is going to put experimental aircraft dead in their sites.

-- Len









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