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Date: Thu, 30 Nov 2000 08:42:56 -0500
To: <lancair.list@olsusa.com>
From: "Lorn H. Olsen" <lorn@mich.com>
Subject: Re: Sales Tax
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Don't forget to call the state and asked them about their taxes.

In Michigan we are supposed to pay Use Tax on everything that is 
purchased out of the state but nobody does at least not on small 
items.

I purchased N31160, already built, in Nevada and had to pay 6% 
Michigan Sales Tax within 30 days of the aircraft arriving in 
Michigan. It is also the aircraft purchaser's responsibility to prove 
what the aircraft is worth. I always figure that tax penalties are 
about 50% of the tax amount even if they say 3% to 6%. It is best to 
pay.

In Michigan, there is no way of hiding an aircraft that is based at 
an airport. Airports report the N numbers of the aircraft based their 
to the state taxing authority. An annual license is also needed. The 
cost of the license is $0.01 per pound of gross weight. Not much but 
enough to keep track of the N number. Inspectors verify these N 
numbers and annual licenses. You can't gain by not paying the use or 
sales taxes in Michigan.

If you want to gain on taxes, write off the portion of any flight and 
proportional maintenance that might have anything to do with work. If 
it doesn't have to do with work, find some work that it does have to 
do with. Start a DBA(Doing Business As) and keep track of the 
expenses and maybe even the income, if you are lucky, on a Schedule 
C. The IRS doesn't care if you rent your airplane but watch out 
because the FAA does. If you need help, call me.

Sincerely,
-- 
Lorn H. 'Feathers' Olsen, US MidTel, Corp.
248-771-1010, LNC2-320, N31161, PTK, Michigan
lorn@mich.com
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LML website:   http://www.olsusa.com/Users/Mkaye/maillist.html
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Please send your photos and drawings to marvkaye@olsusa.com.
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