Florida is at it again with the aviation taxes...sad to say, but true.

Sun-N-Fun was the first thing that popped into my head...lots of new owners from out of state.

From Aero-News Network

Welcome To The Sunshine State... NOT
It appears Florida's tax personnel are targeting new airplane owners in ways that do not exactly make them feel welcome to the state.

Over the course of the last few weeks, ANN has learned of a number of issues that have arisen when owners of new aircraft, generally within the first six months of the sale, have been targeted for "use tax" by agents of the state's Department of Revenue... despite the fact that the targeted aircraft were not owned or operated by state residents.

It starts like this... you buy a new or used aircraft and sign the bill of sale... which starts "the clock." It is Florida's position that for the next six months (possibly thereafter, though the burden of proof reportedly changes at that point), the state has the right to exact the requisite "Use Tax" (Sales Tax) for the fact you partook of the state's services unless you can show an equivalent Use or Sales Tax receipt from another state...

In other words, for those of you who may have bought a $500K Cessna, Cirrus, Columbia, etc... unless you can prove that you paid the equivalent use tax in another state, you owe the state of Florida some $30K if you visited the state in the first six months of your ownership. Mind you, if your sales/use tax bill comes from a state that exacts LESS tax than Florida, the FL Department of Revenue still expects you to pony up the difference... and if you're from a state that exacts a minimum fee (like the few hundred dollars for owners in South Carolina), they will bill you for the WHOLE difference... and its up to you to fight them on it. No kidding.

It makes NO difference to the state if you have any property in Florida, or whether you bought the airplane there, or if you have ANY business interests whatsoever in the state... If Florida catches you here and if they can find a way to stick you with a tax bill, they will.

According to the Florida Tax Code, "There shall be a presumption that any aircraft, boat, mobile home, motor vehicle, or other vehicle purchased in another state, territory of the United States, or the District of Columbia but titled, registered, or licensed in this state is taxable except as otherwise provided in subsection (26) of this rule. This presumption may be rebutted only by documentary evidence that the person owning the aircraft, boat, mobile home, or motor vehicle purchased the aircraft, boat, mobile home, or motor vehicle in another state, territory of the United States, or the District of Columbia six (6) months or more prior to the time it is brought into this state. In order for such property to be presumed exempt as purchased for use outside Florida, the person owning the aircraft, boat, mobile home, motor vehicle, or other vehicle must provide documentary proof that such property was used in other states, territories of the United States, or the District of Columbia for six months or longer under conditions which would lawfully give rise to the taxing jurisdiction of another state, territory, or District of Columbia and any lawfully imposed tax was paid to such state, territory, or District of Columbia before being imported into this state. However, the rental or lease of any aircraft, boat, mobile home, or motor vehicle which is used or stored in this state is taxable without regard to its prior use or tax paid on the purchase outside this state."

Why? Because they can. The very liberal Florida tax code allows them to tax aircraft if they operate at any time during the first six months of a purchase in the state... and according to some interpretations, there may be some legal justification for Florida to tax you if you so much as fly OVER the state.

This problem has been known for a while but recent ramp checks by FL DOR personnel have apparently stepped up, and snagged at least one Cirrus owner and a Meridian owner who came back to Florida to undertake flight training in his new airplane. The Cirrus owner is on the hook for some $30K in additional taxes... the Meridian owner -- well over $100K.

Welcome to Florida, folks, please remove the knife from your back as you cross back over the state lines...

A spokesperson for the FL DOR, Rene Watters, is unapologetic for the issue, telling ANN that they are simply doing their jobs and that if anyone has a problem with that, to "take it up with the legislature." This matter, of course, can be appealed through the courts... but this route necessitates expensive and time consuming litigation, via the use of a trained tax attorney... and you may still lose, after all. Catch 22.

Other DOR staffers opine that aircraft owners have it particularly hard, since they admit that RVs and boats get a somewhat more permissive treatment from them, "...Probably due to better lobbying on the part of their industry reps."

Regardless; it's spooking a number of aircraft owners... we spoke with an avionics shop in Northern Florida that lost some business due to the concern expressed by an aircraft owner over bringing his airplane into the state shortly after he bought it, and Piper is reportedly NOT pleased about the Meridian tax bill noted above... especially at a time when the state is trying to con (uh, convince) Piper to locate the PiperJet facility within the state.

We have a feeling that Piper CEO Jim Bass may have a few things to say, as a result of these recent events, since anyone taking delivery at a Florida Piper plant may find themselves with a tax bill, even if they leave the state right away and never darken the state's borders again.

In the meantime, the recent escalation in DOR ramp inspections is getting aggressive attention from the aviation business community -- and we expect to get some feedback on the matter shortly... we'll update you as to what occurs.

Lowflybye:

I might be mistaken, but it seems like the presumption set forth in that portion of the tax code set out in your post only applies if you have your airplane "titled, registered, or licensed" in Florida in the first six months of ownership. Is there some other section of the code that says this presumption and/or property tax applies just by passing through Florida. That would have some serious constitutional problems.

Joe in MT.

Joe-

I am no a tax guy, just insurance. This article was posted on Aero-News Network and I have forwarded it on to a tax company here in town that handles aviation taxes and writes articles for our magazine. I have asked them to clarify the laws for me as well as write an article for our next magazine concerning these type of issues.

I will advise further when I find out more.

-Chris

lowflybye wrote:Florida is at it again with the aviation taxes...sad to say, but true.

My experience with paying aircraft sales tax in Florida was very positive in the past. In my experience they were happy to accept stated value even when I was late in paying and was subject to added penalties which were waved. Dealing with the fellow at tax enforcement division I dealt with was like dealing with a friend. When taxes were due on another aircraft purchase I allowed it to go delinquent so I could deal with this same fellow.
Be glad you don't live in California. A friend of mine bought a damaged Cessna 150 for an honest to God 7000.00. LA county refused to accept the taxes due and insisted his bill of sale was fraudulent and forced him to pay sales tax on an estimated 14,000.00 value. .... he paid the tax on 14,000.00 at 8.25%. It was just too difficult to fight them.
I hate California. The geography I love, the rest I hate.