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pilotdds(at)aol.com
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 Posted: Wed May 07, 2014 10:41 am Post subject: california sales tax |
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Anyone have personal experience paying sales tax for an aircraft they personaly built in California? [quote][b]
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Bob Turner
Joined: 03 Jan 2009
Posts: 885
Location: Castro Valley, CA
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| Posted: Wed May 07, 2014 9:45 pm Post subject: Re: california sales tax |
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As I purchased the sub kits I reported them, and paid sales tax, on that year's CA-540 income tax form.
When I registered the plane, the tax assessor sent me a questionair for property tax purposes, and asked if I had paid sales tax. I referred him to the various years' 540's; I have never heard anything more about it.
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Bob Turner
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partner14
Joined: 12 Jan 2008
Posts: 540
Location: Granbury Texas
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| Posted: Thu May 08, 2014 5:26 am Post subject: california sales tax |
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Couple of hints for you new builders in tax and spend states:
Reserve your N number using an address in a more tax friendly state. This is how they find out you have, or are building an airplane. >From that day forward they'll hound you wanting the taxes even before the plane is done.
Don't call your plane an RV10, call it a some other name, like Turner Special, Deem's Special, or Saint Aircoupe. Then they have no idea what to tax you because they'll think it's a one of a kind.... and they'll have to use the numbers you give them. Otherwise, Calif will bill you between $1,500 and $2,500 a year for personal property taxes. If you fly 75 hours a year, that's $20 to $33 an hour just for the Calif tax. Their thought process is that if you have a plane, you must be rich, so you can afford to pop for the tax.
There are lot's of states out there with a much more tax friendly approach to aircraft. I moved from Calif to Texas for just that purpose.... our tax is ZERO. I think Idaho is $200 a year for any type aircraft.
Also, in case you haven't noticed, the further south you go from Texas to Florida will be just about the only fuel you'll find in the $4 range. Our fuel is currently $4.40. 0TX1.
Don McDonald
#40636 650 hours, and enjoying every minute of it.
From: Bob Turner <bobturner(at)alum.rpi.edu>
To: rv10-list(at)matronics.com
Sent: Thursday, May 8, 2014 12:45 AM
Subject: Re: california sales tax
--> RV10-List message posted by: "Bob Turner" <bobturner(at)alum.rpi.edu (bobturner(at)alum.rpi.edu)>
As I purchased the sub kits I reported them, and paid sales tax, on that year's CA-540 income tax form.
When I registered the plane, the tax assessor sent me a questionair for property tax purposes, and asked if I had paid sales tax. I referred him to the various years' 540's; I have never heard anything more about it.
--------
Bob Turner
RV-10 QB
Read this topic online here:
http://forums.matronics.com/viewtopic.php?p=422986#422986http://www.matronics.com/Navigator?RV10-Lista href="http://forums.matronics.com/" = --> [quote][b]
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Don A. McDonald
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rv10flyer(at)live.com
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| Posted: Thu May 08, 2014 6:09 am Post subject: california sales tax |
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Like Bob, I paid as the kits arrived, except I filled out forms versus
adding it to my tax forms. When it was all done I called the Board of
Taxation and discussed my file and advised the plane was completed.
--
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rleffler
Joined: 05 Nov 2006
Posts: 680
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| Posted: Thu May 08, 2014 6:16 am Post subject: california sales tax |
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Ohio is similar, but not as painful as CA. Once you register the N#, you have to pay the $15/seat annual tax even if they aircraft is not airworthy.
It took awhile for them to track me down, but they did. Fortunately, they didn't ask for retroactive taxes from registration date.
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Bob Leffler
N410BL - Phase I
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flying-nut(at)cfl.rr.com
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| Posted: Thu May 08, 2014 6:42 am Post subject: california sales tax |
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Excellent advice. One other thought is to do the 'Delaware Corp LLC' thingy and let the corp own the aircraft. PITA but it may shield you from some liability exposure also.
Linn
On 5/8/2014 9:25 AM, Don McDonald wroteC
[quote] Couple of hints for you new builders in tax and spend states:
Reserve your N number using an address in a more tax friendly state. This is how they find out you have, or are building an airplane. >From that day forward they'll hound you wanting the taxes even before the plane is done.
Don't call your plane an RV10, call it a some other name, like Turner Special, Deem's Special, or Saint Aircoupe. Then they have no idea what to tax you because they'll think it's a one of a kind.... and they'll have to use the numbers you give them. Otherwise, Calif will bill you between $1,500 and $2,500 a year for personal property taxes. If you fly 75 hours a year, that's $20 to $33 an hour just for the Calif tax. Their thought process is that if you have a plane, you must be rich, so you can afford to pop for the tax.
There are lot's of states out there with a much more tax friendly approach to aircraft. I moved from Calif to Texas for just that purpose.... our tax is ZERO. I think Idaho is $200 a year for any type aircraft.
Also, in case you haven't noticed, the further south you go from Texas to Florida will be just about the only fuel you'll find in the $4 range. Our fuel is currently $4.40. 0TX1.
Don McDonald
#40636 650 hours, and enjoying every minute of it.
From: Bob Turner <bobturner(at)alum.rpi.edu> (bobturner(at)alum.rpi.edu)
To: rv10-list(at)matronics.com (rv10-list(at)matronics.com)
Sent: Thursday, May 8, 2014 12:45 AM
Subject: Re: california sales tax
--> RV10-List message posted by: "Bob Turner" <bobturner(at)alum.rpi.edu (bobturner(at)alum.rpi.edu)>
As I purchased the sub kits I reported them, and paid sales tax, on that year's CA-540 income tax form.
When I registered the plane, the tax assessor sent me a questionair for property tax purposes, and asked if I had paid sales tax. I referred him to the various years' 540's; I have never heard anything more about it.
--------
Bob Turner
RV-10 QB
Read this topic online here:
http://forums.matronics.com/viewtopic.php?p=422986#422986http://www.matronics.com/Navigator?RV10-Lista href="http://forums.matronics.com/" = -->
No virus found in this message.
Checked by AVG - www.avg.com
05/08/14 [b]
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Kellym
Joined: 10 Jan 2006
Posts: 1705
Location: Sun Lakes AZ
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| Posted: Thu May 08, 2014 6:49 am Post subject: california sales tax |
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I am told that some states tax the aircraft where it is parked and an
out-of-state LLC may be more trouble than not having one, especially
with regard to CA.
On 5/8/2014 7:41 AM, Linn Walters wrote:
| Quote: | Excellent advice. One other thought is to do the 'Delaware Corp LLC'
thingy and let the corp own the aircraft. PITA but it may shield you
from some liability exposure also.
Linn
On 5/8/2014 9:25 AM, Don McDonald wroteC
> Couple of hints for you new builders in tax and spend states:
> Reserve your N number using an address in a more tax friendly state.
> This is how they find out you have, or are building an airplane.
> >From that day forward they'll hound you wanting the taxes even
> before the plane is done.
> Don't call your plane an RV10, call it a some other name, like Turner
> Special, Deem's Special, or Saint Aircoupe. Then they have no idea
> what to tax you because they'll think it's a one of a kind.... and
> they'll have to use the numbers you give them. Otherwise, Calif will
> bill you between $1,500 and $2,500 a year for personal property
> taxes. If you fly 75 hours a year, that's $20 to $33 an hour just
> for the Calif tax. Their thought process is that if you have a
> plane, you must be rich, so you can afford to pop for the tax.
>
> There are lot's of states out there with a much more tax friendly
> approach to aircraft. I moved from Calif to Texas for just that
> purpose.... our tax is ZERO. I think Idaho is $200 a year for any
> type aircraft.
>
> Also, in case you haven't noticed, the further south you go from
> Texas to Florida will be just about the only fuel you'll find in the
> $4 range. Our fuel is currently $4.40. 0TX1.
>
> Don McDonald
> #40636 650 hours, and enjoying every minute of it.
> ------------------------------------------------------------------------
> *From:* Bob Turner <bobturner(at)alum.rpi.edu>
> *To:* rv10-list(at)matronics.com
> *Sent:* Thursday, May 8, 2014 12:45 AM
> *Subject:* Re: california sales tax
>
>
> <mailto:bobturner(at)alum.rpi.edu>>
>
> As I purchased the sub kits I reported them, and paid sales tax, on
> that year's CA-540 income tax form.
> When I registered the plane, the tax assessor sent me a questionair
> for property tax purposes, and asked if I had paid sales tax. I
> referred him to the various years' 540's; I have never heard anything
> more about it.
>
> --------
> Bob Turner
> RV-10 QB
>
>
> Read this topic online here:
>
> http://forums.matronics.com/viewtopic.php?p=422986#422986http://www.matronics.com/Navigator?RV10-List
> <http://forums.matronics.com/viewtopic.php?p=422986#422986>a
> href="http://forums.matronics.com/" = -->
>
>
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> *
> * <http://www.matronics.com/contribution>
> <http://www.matronics.com/contribution>
>
> No virus found in this message.
> Checked by AVG - <http://www.matronics.com/contribution>www.avg.com
> <http://www.avg.com>
> 05/08/14
>
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| | - The Matronics RV10-List Email Forum - | | | Use the List Feature Navigator to browse the many List utilities available such as the Email Subscriptions page, Archive Search & Download, 7-Day Browse, Chat, FAQ, Photoshare, and much more:
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Kelly McMullen
A&P/IA, EAA Tech Counselor # 5286
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davidsoutpost(at)comcast.
Guest
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| Posted: Thu May 08, 2014 9:04 am Post subject: california sales tax |
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The State of Michigan never bothered me until the plane was issued its airworthiness certificate. I never claimed any kit purchases when I purchased them. The State sent me a couple forms to fill out about a month after the cert was issued and I filled them out, made copies of all my receipts, and sent it all back in a big envelope with a fat check for the out of state non-taxed purchases. IIRC, The State charges around $18 yearly for the registration fee. We get a nice State of Michigan sectional and a spiral bound Airport Facilities Directory in return. I can't complain.
From: "Kelly McMullen" <kellym(at)aviating.com>
To: rv10-list(at)matronics.com
Sent: Thursday, May 8, 2014 10:49:05 AM
Subject: Re: Re: california sales tax
--> RV10-List message posted by: Kelly McMullen <kellym(at)aviating.com>
I am told that some states tax the aircraft where it is parked and an
out-of-state LLC may be more trouble than not having one, especially
with regard to CA.
On 5/8/2014 7:41 AM, Linn Walters wrote:
| Quote: | Excellent advice. One other thought is to do the 'Delaware Corp LLC'
thingy and let the corp own the aircraft. PITA but it may shield you
from some liability exposure also.
Linn
On 5/8/2014 9:25 AM, Don McDonald wroteC
> Couple of hints for you new builders in tax and spend states:
> Reserve your N number using an address in a more tax friendly state.
> This is how they find out you have, or are building an airplane.
> >From that day forward they'll hound you wanting the taxes even
> before the plane is done.
> Don't call your plane an RV10, call it a some other name, like Turner
> Special, Deem's Special, or Saint Aircoupe. Then they have no idea
> what to tax you because they'll think it's a one of a kind.... and
> they'll have to use the numbers you give them. Otherwise, Calif will
> bill you between $1,500 and $2,500 a year for personal property
> taxes. If you fly 75 hours a year, that's $20 to $33 an hour just
> for the Calif tax. Their thought process is that if you have a
> plane, you must be rich, so you can afford to pop for the tax.
>
> There are lot's of states out there with a much more tax friendly
> approach to aircraft. I moved from Calif to Texas for just that
> purpose.... our tax is ZERO. I think Idaho is $200 a year for any
> type aircraft.
>
> Also, in case you haven't noticed, the further south you go from
> Texas to Florida will be just about the only fuel you'll find in the
> $4 range. Our fuel is currently $4.40. 0TX1.
>
> Don McDonald
> #40636 650 hours, and enjoying every minute of it.
> ------------------------------------------------------------------------
> *From:* Bob Turner <bobturner(at)alum.rpi.edu>
> *To:* rv10-list(at)matronics.com
> *Sent:* Thursday, May 8, 2014 12:45 AM
> *Subject:* Re: california sales tax
>
> --> RV10-List message posted by: "Bob Turner" <bobturner(at)alum.rpi.edu
> <mailto:bobturner(at)alum.rpi.edu>>
>
> As I purchased the sub kits I reported them, and paid sales tax, on
> that year's CA-540 income tax form.
> When I registered the plane, the tax assessor sent me a questionair
> for property tax purposes, and asked if I had paid sales tax. I
> referred him to the various years' 540's; I have never heard anything
> more about it.
>
> --------
> Bob Turner
> RV-10 QB
>
>
> Read this topic online here:
>
> http://forums.matronics.com/viewtopic.php?p=422986#422986http://www.matronics.com/Navigator?RV10-List
> <http://forums.matronics.com/viewtopic.php?p=422986#422986>a
> href="http://forums.matronics.com/" = -->
>
>
> <http://www.matronics.com/contribution>
> <http://www.matronics.com/contribution>
> <http://www.matronics.com/contribution>
> <http://www.matronics.com/contribution>
> <http://www.matronics.com/contribution>
> *
> * <http://www.matronics.com/contribution>
> <http://www.matronics.com/contribution>
>
> No virus found in this message.
> Checked by AVG - <http://www.matronics.com/contribution>www.avg.com
> <http://www.avg.com>
> 05/08/14
>
*
*
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[quote][b]
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Bob Turner
Joined: 03 Jan 2009
Posts: 885
Location: Castro Valley, CA
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| Posted: Thu May 08, 2014 10:42 am Post subject: Re: california sales tax |
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CA did not bother me when I had a reserved N number. Once I registered the plane, they sent an inquiry: I replied that, without an A/W certificate, I did not own an airplane, just airplane parts. They accepted that.
CA does not care where it's registered. They routinely have airports send them lists of N numbers of hangar and tie down occupiers, and the state sends them a bill unless you can show you're transient.
If they do not know the type, they WILL send someone out to see it, and demand to see all the invoices, including your insurance. So unless you choose to under-insure, they will find out.
I don't like to pay taxes anymore than anyone else, but since they tax cars and boats too it's hard to feel singled out. And in the big picture, the property taxes on cars, airplanes, and hangar are cancelled out by the decrease (in inflation adjusted dollars) I see every year on our house's property tax, thanks to CA's prop 13. It's a crazy way to run a state, but this leads to political comments which I try to leave to other forums.
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Bob Turner
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Kellym
Joined: 10 Jan 2006
Posts: 1705
Location: Sun Lakes AZ
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| Posted: Thu May 08, 2014 11:48 am Post subject: california sales tax |
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I agree with most of info. However, what is state inspector going to do
when you tell him you didn't keep invoices and are not insuring the
plane because insurance is too expensive? If you registered it as a
Bob-10, how are they going to come up with a valuation?
Fortunately, AZ did away with personal property tax on experimental
aircraft, probably because of the difficulty establishing value.
But they still nab sales tax and a yearly registration fee.
On 5/8/2014 11:42 AM, Bob Turner wrote:
| Quote: |
If they do not know the type, they WILL send someone out to see it, and demand to see all the invoices, including your insurance. So unless you choose to under-insure, they will find out.
|
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Kelly McMullen
A&P/IA, EAA Tech Counselor # 5286
KCHD |
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Bob Turner
Joined: 03 Jan 2009
Posts: 885
Location: Castro Valley, CA
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| Posted: Thu May 08, 2014 1:44 pm Post subject: Re: california sales tax |
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My experience is that if they do not know, they will guess high, leave it to you to prove them wrong. You can always go to court. I think mine is over appraised by about $10K. For the $100 extra tax it isn't worth the hassle to appeal.
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Bob Turner
RV-10 QB |
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