When you are building your own plane and buying parts as you go, are you paying sales tax on all those parts?
When your new plane is completed, do you then apply to your state aeronautical board to comply with state registration requirements for new aircraft? To license that aircraft, do you then have to pay the sales tax on your newly completed plane for its worth?
Double sales tax!
At least that is what is going on this state. How does your state stack up?

The South Dakota Pilots Assoc. recently sent a letter to members laying out this double taxation issue and will address this problem in a January meeting scheduled with the state aviation and tax folks at the capital.
State budgets are tight but wish us well.

I didn't pay sales tax on many parts of my RV, but paid the 5% when I registered it with the state.

Speaking of taxes: I just got a "use tax bill of 6%", from the state of Idaho from my wheel ski purchase from Canada. It took US customs almost 2 years to get the info to the state, and the state is charging me interest during this time period! It seems that I am getting off easy, it was pointed out to me when I bitched about the interest charge for something I knew nothing about and had to pay more due to customs slowness, that I at least was not being charged a penalty. I took the hint , shut up, and paid up, about $250.00. Now I know the next time I get something from Canada shipped to Idaho, I need to request a special tax form so I can pay the use tax right away

Kids, before this is over you'll be paying aviation fuel taxes and landing fees too. You'll be paying federal income tax and be charged for GPS satellite access too. There's no end to it. I may have to go back to playing piano in a whore house. You meet a better class of people than you do dealing with government.

^^^^^AMEN to that!

In Idaho you get a bill from the state for sales tax on the parts you buy, after you register the aircraft. If you do not have EXACT numbers and reciepts for every part you bought, they "estimate" the cost and you pay taxes on the estimate, their estimate is final, you have no appeal. In the case of an RV-3 my dad built in the mid 90's, the estimate was $35,000.00 plus the retail price of all the radios in it. He had reciepts, etc. to show he paid about 1/3 that amount. Also in Idaho on your income tax form you are required to list everything you bought on-line, mail-order, or while out of state, and pay a "use tax" on ALL of it, but this law is largly ignored by everyone, whitch is why they charge interest and penalties on the few people that get caught by customs or some other random event.

In Massachusetts, we pay no sales tax on anything aviation related, and no use tax. We do pay a fee to the RMV, who took over the Mass Aeronautics Commission, based on gross weight of our planes. That amounts to $165.00 on my Cherokee and $100.00 on my Rans S7S..

Does this "equate" to sales tax +property tax ? Oregon does NOT have sales tax but a pretty healthy "property Tax" .Nevada has both sales and property tax. Still looking for a tax free state -?? . Airplanes /motor homes, boats are a very attractive targets for taxes by states. Hundreds of Big Jets are registered in Delaware corporations to avoid taxes -it makes a lot of sense when your spending millions for your personal jet. Don't know if it's worth it for my personal aircraft.

I had to pay the tax in two states. I bought my Kitfox kit and built it while living in Oregon. Oregon prides itself in having no sales tax. It does have a State Income Tax instead though. I had to pay state income tax on the income I used to buy my kit.

I then moved to Washington. Washington prides itself that it has no State Income Tax. Washington has sales tax instead. I had to pay 8% use tax on the value of my Kitfox. If I had bought and built my airplane kit in another state that has sales tax I would only pay any diference in the Washington state sales tax rate and the other state sales tax I had already paid if it was less than washington's. The Oregon Imcome tax I paid instead of sales tax didn't cut any mustard with Washington's Department of Revenue.

182 STOL driver wrote:Does this "equate" to sales tax +property tax ? Oregon does NOT have sales tax but a pretty healthy "property Tax" .Nevada has both sales and property tax. Still looking for a tax free state -?? . Airplanes /motor homes, boats are a very attractive targets for taxes by states. Hundreds of Big Jets are registered in Delaware corporations to avoid taxes -it makes a lot of sense when your spending millions for your personal jet. Don't know if it's worth it for my personal aircraft.

"Still looking for a tax free state?"

It's beyond most of us but here it is: Move to the Virgin Islands
The American Paradise: Using A Tax-Free U.S. Virgin Islands Exempt Company For FAA Registration Of Foreign-Owned Aircraft
By William L. Blum of Solomon Blum Heymann LLP

Practitioners often focus on the voting trust when they create an ownership structure for a foreign client who is seeking Federal Aviation Administration ("FAA") registration of an aircraft. When the stock of a corporation formed in the United States is held by a voting trustee who is a U.S. citizen, the foreign owner of the corporation can be transformed into a "United States citizen" for purposes of FAA registration. This focus on the voting trust, and the requirement that the president and two-thirds of the board of directors and other managing officers of the corporation be U.S. citizens, is understandable because it leads to eligibility for the prized FAA "N" number.

If your are not lost yet, the rest of the article is here.

http://library.findlaw.com/2000/Oct/1/130150.html

We have a flat tax on the planes by our Burough (county) 60 bucks my plane and each of my boats. No state tax income or sales tax. Just city and burough. Not all of them charge a tax on our toys, just the greedy one I live in LOL.

182 STOL wrote:.Nevada has both sales and property tax. Still looking for a tax free state -?? .

I hear Somalia has lovely summers. And cheap real estate to boot.

Dale Moul wrote:In Idaho you get a bill from the state for sales tax on the parts you buy, after you register the aircraft. If you do not have EXACT numbers and reciepts for every part you bought, they "estimate" the cost and you pay taxes on the estimate, their estimate is final, you have no appeal. In the case of an RV-3 my dad built in the mid 90's, the estimate was $35,000.00 plus the retail price of all the radios in it. He had reciepts, etc. to show he paid about 1/3 that amount. Also in Idaho on your income tax form you are required to list everything you bought on-line, mail-order, or while out of state, and pay a "use tax" on ALL of it, but this law is largly ignored by everyone, whitch is why they charge interest and penalties on the few people that get caught by customs or some other random event.

Yeah, like I said, once I realized I wasn't paying PENALTIES, just INTEREST, ( ), I figured screw it, no use in butting heads with them, I would lose anyway.

I need to order a 2 or 3 thousand dollar item for my crane load cell I would have (before I knew about this) ordered direct from the Canadian manufacturer, now, I'll just get it from the Idaho dealer. Less hassle, give him the business, same cost, LESS HASSLE!

On the other hand, I just got my 2012 Idaho registration decal (looks cool on the car or whatever) for the airplane: $15.00 for the S-7S, so no complaints with the Idaho tax system all in all ( ).

In Utah, you need to pay sales tax. I was on my third plane when I found that out. I traded the 172 for the 175 and changed names on the registration. They weren't going to accept the trade because I changed names. They finally let me use the trade so it helped but I had to pay sales tax on three planes. Be warned, they will find you.

The bill to exempt Homebuilt Aircraft parts from the state sales tax passed the tax committee on 9 to 5 vote of members present with the addition of one amendment by the committee stating that parts purchased for repair and maintenance of Homebuilt aircraft will not be exempt. The State Tax Division opposed all forms of the bill. It will go to the full house for vote.

This bill was written by a home builder and submitted by his representative. The builder thought the re-interpretation of existing law by the current administration to tax parts was unfair. Homebuilders are manufacturers. They had not been taxed before. Aircraft are already taxed at 4% when the registration was paid after it was flying and annually after that. The argument is that now it becomes a double tax. He imported an engine from Canada and they nailed him for 700 bucks. He imported it several years ago and they now want to go back and collect the tax since his plane is not done yet. Ex Post Facto type interp?

I imported a whole plane with engine on and had it registered and flying before this thing took effect on those planes still being built. I am exempt already but only the two of us testified. He brought the meat to the table, I was the Hamburger Helper. AOPA and EAA sent letters in support as did the State Aeronautics Board.

dirtstrip wrote: He brought the meat to the table, I was the Hamburger Helper.

Good beef analogy, Lynn. Good on you for seeing this through. Sets a good precedent to defend it in other states should it pass in yours.

He brought the meat to the table, I was the Hamburger Helper.
If you have a $100 hamburger, how much is the Hamburger Helper worth?

200 bucks if your name is McDonald's and pass all of it off as hamburger.

The bill to exempt Homebuilt Aircraft parts from sales tax during construction phase passed the S.D. House of Representatives today by a whopping 45 Yeas to 25 Nays. It will now go to the Senate so we get to go through all of this once more. It was an education for some Reps. when a backer of the bill on the floor stated that to tax the parts purchased to construct an aircraft, homebuilt or otherwise, would set a precedent in this state and could also be expanded to put sales tax on all parts used to construct farm machinery before it left the factory. Then the completed piece of equipment would again be subject to sales tax when it is sold. That one hit the mark in an ag state putting our ag manufactures price tags at a disadvantage to surrounding states.

Nay voters are looking for any increase in sales tax for the state since things are tight and we have no state income tax or personal property tax and "real" property taxes are reserved for counties and schools.

dirtstrip wrote:The bill to exempt Homebuilt Aircraft parts from the state sales tax passed the tax committee on 9 to 5 vote of members present with the addition of one amendment by the committee stating that parts purchased for repair and maintenance of Homebuilt aircraft will not be exempt. The State Tax Division opposed all forms of the bill. It will go to the full house for vote.

This bill was written by a home builder and submitted by his representative. The builder thought the re-interpretation of existing law by the current administration to tax parts was unfair. Homebuilders are manufacturers. They had not been taxed before. Aircraft are already taxed at 4% when the registration was paid after it was flying and annually after that. The argument is that now it becomes a double tax. He imported an engine from Canada and they nailed him for 700 bucks. He imported it several years ago and they now want to go back and collect the tax since his plane is not done yet. Ex Post Facto type interp?

I imported a whole plane with engine on and had it registered and flying before this thing took effect on those planes still being built. I am exempt already but only the two of us testified. He brought the meat to the table, I was the Hamburger Helper. AOPA and EAA sent letters in support as did the State Aeronautics Board.

Congrats on getting it 1/2 way there... Hopefully you have a good sponsor to the bill on the senate side...

Ben.