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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