X-Virus-Scanned: clean according to Sophos on Logan.com Return-Path: Sender: To: lml@lancaironline.net Date: Wed, 03 Nov 2010 16:31:08 -0400 Message-ID: X-Original-Return-Path: Received: from elasmtp-dupuy.atl.sa.earthlink.net ([209.86.89.62] verified) by logan.com (CommuniGate Pro SMTP 5.3.10) with ESMTP id 4552633 for lml@lancaironline.net; Tue, 02 Nov 2010 16:06:22 -0400 Received-SPF: none receiver=logan.com; client-ip=209.86.89.62; envelope-from=douglasbrunner@earthlink.net DomainKey-Signature: a=rsa-sha1; q=dns; c=nofws; s=dk20050327; d=earthlink.net; b=OBeSiYTfOjWZnK7mRhj1PFs/NaIWfAYlpJylfCdsC4RIRNIK7AB+VqN2Rnt9KkAs; h=Received:From:To:References:In-Reply-To:Subject:Date:Message-ID:MIME-Version:Content-Type:X-Mailer:Thread-Index:Content-Language:X-ELNK-Trace:X-Originating-IP; Received: from [74.93.196.177] (helo=DougsLaptop) by elasmtp-dupuy.atl.sa.earthlink.net with esmtpa (Exim 4.67) (envelope-from ) id 1PDN74-0000ef-Ks for lml@lancaironline.net; Tue, 02 Nov 2010 16:05:46 -0400 From: "Douglas Brunner" X-Original-To: "'Lancair Mailing List'" References: In-Reply-To: Subject: RE: [LML] Aircraft Taxes X-Original-Date: Tue, 2 Nov 2010 16:05:49 -0400 X-Original-Message-ID: <00a001cb7ac9$58170570$08451050$@net> MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_00A1_01CB7AA7.D1056570" X-Mailer: Microsoft Office Outlook 12.0 Thread-Index: Act6xTb+xfbysV7TQNSz+lHOafE+EwAAc0aA Content-Language: en-us X-ELNK-Trace: ad85a799c4f5de37c2eb1477c196d22294f5150ab1c16ac0f2b12df0f75675a4c7e88f437b61a485a91d39f91b85e268350badd9bab72f9c350badd9bab72f9c X-Originating-IP: 74.93.196.177 This is a multi-part message in MIME format. ------=_NextPart_000_00A1_01CB7AA7.D1056570 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Here is what happened to me, I live in Maryland. When I first registered my kit with the FAA, but before it was built, I received a demand from the State of Maryland asking for 5% of the "value" of the plane - $200,000. I responded that the plane was not done (with pictures) and in any case was in Oregon (it was). When I finished my plane and moved it to my hangar in Maryland (KMTN - a "state" airport) I got another notice from the state again asking for 5% of $200,000. I paid it. I have been told that the hangars at my airport are periodically inspected and all information is sent to the State Tax authorities. Maryland has a "Use Tax" which it applies to planes and boats that are based in the state. If you have paid sales tax in another state you can offset Maryland's "Use Tax". You can also prove that the plane/boat is not based in Maryland - my accountant told me of a story in which a boat owner did exactly that. Otherwise it is hard to avoid the long arm of the state. If I was to do it again, I would try to get some kind of shell corp set up BEFORE I even bought the kit and I wouldn't base it at a state airport. On the other hand, I got to deduct the "use tax" on my taxes. D. Brunner N241DB From: Lancair Mailing List [mailto:lml@lancaironline.net] On Behalf Of rwolf99@aol.com Sent: Tuesday, November 02, 2010 3:36 PM To: lml@lancaironline.net Subject: [LML] Aircraft Taxes Lots of good info on aircraft taxes. However, there are multiple taxes that we should b concerned about. 1) Initial tax (my words). This is tax paid when you acquire an aircraft. Sometimes it is called sales tax and sometimes it is called use tax, I think. I do know that if you buy a $100,000 airplane in another state and pay sales tax there, own it for decades and move to California, you have to pay a tax equal to California sales tax less any tax you might have paid way back when. My friend with a Luscombe that he owned for thirty years cannot afford to bring his airplane back to California because of this, But some states have exemptions. Colorado exempted aircraft that were "assembled from parts", i.e. kitplanes, at least for the initial owner. This was done in an attempt to entice aircraft manufacturers to relocate to Colorado and the homebuilders benefitted from this. Sales tax in Arizona, if applied to a $100K Lancair, would cost more than painting my aircraft, and we know how much *that* costs. 2) Yearly tax. California called this "use tax". Arizona calls this a registration fee. I'm not too concerned about this in Arizona because it is 1/2 percent of value (half of California's annual fee) and I think homebuilts get a break. I'll call the state, give them the name of a random guy on this list (just kidding, folks) and report back with what I find out. My info will be limited to initial registration of a plane built in Arizona, so it will be of limited interest. - Rob Wolf ------=_NextPart_000_00A1_01CB7AA7.D1056570 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

Here is what happened to me, I live in = Maryland.

 

When I first registered my kit with the FAA, but before = it was built, I received a demand from the State of Maryland asking for 5% of = the “value” of the plane - $200,000.  I responded that the plane was not done = (with pictures) and in any case was in Oregon (it was).

 

When I finished my plane and moved it to my hangar in = Maryland (KMTN – a “state” airport) I got another notice from = the state again asking for 5% of $200,000.  I paid it.  I have = been told that the hangars at my airport are periodically inspected and all = information is sent to the State Tax authorities.

 

Maryland has a “Use Tax” which it applies to = planes and boats that are based in the state.  If you have paid sales tax = in another state you can offset Maryland’s “Use = Tax”.  You can also prove that the plane/boat is not based in Maryland – my = accountant told me of a story in which a boat owner did exactly that.  = Otherwise it is hard to avoid the long arm of the state.

 

If I was to do it again,  I would try to get some = kind of shell corp set up BEFORE I even bought the kit and I wouldn’t base it at = a state airport.  On the other hand, I got to deduct the “use = tax” on my taxes.

 

D. Brunner

N241DB

 

From:= Lancair = Mailing List [mailto:lml@lancaironline.net] On Behalf Of = rwolf99@aol.com
Sent: Tuesday, November 02, 2010 3:36 PM
To: lml@lancaironline.net
Subject: [LML] Aircraft Taxes

 

Lots of good info on aircraft taxes.  However, there = are multiple taxes that we should b concerned about.

 

1)  Initial tax (my words).  This is tax paid = when you acquire an aircraft.  Sometimes it is called sales tax and = sometimes it is called use tax, I think.  I do know that if you buy a $100,000 = airplane in another state and pay sales tax there, own it for decades and move to California, you have to pay a tax equal to California sales tax less any = tax you might have paid way back when.  My friend with a Luscombe that = he owned for thirty years cannot afford to bring his airplane back to = California because of this,  But some states have exemptions.  Colorado = exempted aircraft that were "assembled from parts", i.e. kitplanes, at = least for the initial owner.  This was done in an attempt to entice = aircraft manufacturers to relocate to Colorado and the homebuilders benefitted = from this.  Sales tax in Arizona, if applied to a $100K = Lancair, would cost more than painting my aircraft, and we know how much *that* = costs.

 

2) Yearly tax.  California called this "use tax".  Arizona calls this a registration fee.  I'm not = too concerned about this in Arizona because it is 1/2 percent of value (half = of California's annual fee) and I think homebuilts get a = break.

 

I'll call the state, give them the name of a random guy on = this list (just kidding, folks) and report back with what I find out.  = My info will be limited to initial registration of a plane built in Arizona, so = it will be of limited interest.

 

- Rob Wolf

 



 

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