REFLECTOR: FLORIDA OFFICIALS GOING AFTER AIRCRAFT SALES, USE TAXES

Richard J. Gentil richard at naples-air-center.com
Sun Feb 5 16:19:09 CST 2006


Chuck,

Way too much work. It was only a little attempt at humor, which is why I 
put the ";-)" at the end.

Richard

Chuck Jensen wrote:

> Richard,
>
>  
>
> Good idea but doesn't work.  When you move (domicile) the plane in a 
> new state, the new State wants to collect use/excise tax, which is in 
> lieu of Sales Tax.  Then of course, they'll want to nick you every 
> year for personal property taxes as well.   And, if the FAA finds out 
> that your registration isn't accurate...that's a whole new set of 
> problems.  It's a lot of work being a tax-dodger. 
>
>  
>
> Chuck Jensen
>
>  
>
>  
>
> -----Original Message-----
> *From:* reflector-bounces at tvbf.org [mailto:reflector-bounces at tvbf.org] 
> *On Behalf Of *Richard J. Gentil
> *Sent:* Sunday, February 05, 2006 12:22 PM
> *To:* Velocity Aircraft Owners and Builders list
> *Subject:* Re: REFLECTOR: FLORIDA OFFICIALS GOING AFTER AIRCRAFT 
> SALES, USE TAXES
>
>  
>
> Well that or everyone just first register their newly finished Velo in 
> NM, and move a week later. ;-)
>
> Richard
>
> Grigore Rosu wrote:
>
> But what if one sells the kit?  I guess that the final builder, the 
> one who registers the airplane is the one who pays the taxes.  If that 
> is true, then paying sales taxes right after receiving the kit is a 
> bit risky, because statistics say that only 8% of builders finish 
> their airplane.  Of course, I believe I'll be one of those 8%, but you 
> never know.
>
> Grigore
>
>
>
> On Sun, 5 Feb 2006, Scott Baker wrote:
>
>
> In this world nothing can be said to be certain, except death and 
> taxes. Benjamin Franklin
>
> Just about every state with a sales tax applies the tax towards 
> aircraft purchases.  Buyers of Velocity kits sometimes think that the 
> act of receiving the aircraft in from another state obsolves them of 
> paying sales tax in the state in which they reside.  Wrong.  It only 
> means that the seller (i.e. Velocity, Inc.) need not collect the tax - 
> you are still obligated to pay your local tax collector.
>
> The FAA shares its aircraft registration database with state tax 
> agencies.  Until Velocity builders actually register their aircraft 
> (obtain an N-number) - the tax man probably does not know that your 
> Velocity exists.  Soon after you apply for your N-number, expect a 
> letter from the local tax agency offering their congratulations on 
> your "new" purchase - and to please provide evidense that you have 
> paid sales tax (either in your home state or in the state in which you 
> purchased the aircraft).  Credit is given to sales tax paid in other 
> states.
>
> Smart owners will march down to the tax collectors office soon after 
> they receive their kit - and with factory invoice in hand to document 
> the $60,000 purchase price of their "aircraft" - pay the local sales 
> tax and say "Have a nice day!"  Most local tax officials will think 
> that $60K is the total price of the aircraft - and fail to realize 
> that builders have upcoming expendatures in equipment (engine, 
> propeller, avionics).  If you are lucky,, getting your name on the tax 
> roll at the onset might keep the assessor's office from performing an 
> audit after the aircraft is completed.  Ask me no questions, I will 
> tell you no lies.
>
> A quick note about parts versus labor - and what is taxable.  Believe 
> it or not, many states apply sale tax to "fabrication labor" (as 
> opposed to labor for repairs, which is generally not taxable).  Let's 
> say you ignored the sales tax issue until the aircraft becomes 
> registered.  The local tax office calls to say that since they cannot 
> find "Velocity" in their aircraft price guides - please make yourself 
> available for an appraiser, who will take a close look at the aircraft 
> and have you complete a questionairre regarding the aircraft's 
> components (engine make, model, hours; radio equipment; etc).  The 
> appraiser compares your aircraft to other Velocity models that are 
> listed in Trade--a-Plane ... and calculates you have a $150,000 
> aircraft.  "Yes, that's true", you say - but I only have $80,000 worth 
> of parts invested in the aircraft.  The reply from the tax people 
> could be - "That's nice, but you still owe taxes on the $70,000 worth 
> of work you put into the aircraft."  This is another reason, in my 
> opinion, to pay the sales tax on the kit soon after it arrives - and 
> hope the local tax office does not follow up with annual appraisals.
>
> No one likes paying taxes.  Consult a tax specialist to learn what you 
> might do to legally lower or eliminate taxes by registering the 
> aircraft in another state - or in the course of a business with a 
> resale license.  For some this is an option - and for others, not.
>
> One last comment - you are not going to win an argument with the sales 
> tax people.
>
> Scott Baker
>
>
>
>
> ----- Original Message -----
>  From: Jim Agnew
>  To: Velocity Reflector
>  Sent: Saturday, February 04, 2006 11:19 AM
>  Subject: REFLECTOR: FLORIDA OFFICIALS GOING AFTER AIRCRAFT SALES, USE 
> TAXES
>
>
>  Take Note!
>
>
>  ~~~ AOPA Close to Home ~~~
>  FLORIDA OFFICIALS GOING AFTER AIRCRAFT SALES, USE TAXES
>  Members are alerting AOPA to a recurring situation in Florida where
>  the state, in reviewing its information on recent FAA aircraft
>  registrations, is aggressively seeking sales or use taxes from new
>  aircraft owners who may not have already paid. Typically, for newly
>  constructed experimental aircraft, owners are only required to pay tax
>  on the parts, not the builder's labor. However, if you register the
>  aircraft before completion, you can be responsible for taxes as of the
>  registration date unless you prove otherwise. As always, check with
>  your financial advisor for details. AOPA's Pilot's Guide to Taxes
>  ( http://www.aopa.org/members/files/guides/tax_guide.html ) has a 
> listing
>  of Web sites for revenue departments in all states and phone numbers
>  to aid you or your accounting professional.
>
>
>
>
>  James F. Agnew Jim_Agnew_2 at Yahoo.Com <mailto:Jim_Agnew_2 at Yahoo.Com> 
> Tampa, FL Velocity 173 Elite Aircraft Completed & Flying
>
>
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