Question about taxes. I bought my skywagon back in March and knew they would eventually come after me for state sales tax. Well I finally got a notice in the mail today from the state wanting to collect. I have two options:
1-send them a copy of the bill of sale
2-have them assess taxes on fair market value for a fully loaded 1953 Cessna 180

Question is: Where do they figure out what a fully loaded 1953 Cessna Skywagon goes for?

Just trying to figure out which will cost me more. You know, so I can pay my fair share into government pockets.

Just a thought but you can get on the AOPA sight and get a vref for your value. you put all the parameters in.
Also when I tried to get insurance from avemco they would not insure my 195 for over 50k as that was what they thought it was worth in pristine condition???
The way values are right now I would go with the value if you paid a high price for the 180
Hope that helps.
GT

When it came time to pay my tax bill, I searched all of the comps on Barnstormers, Controller, Trade A Plane and any other source for late 50's Cessna 182's. I averaged out the asking prices and sent in my bill with my check . I can't remember what I came up with, maybe around $2500.00 for the tax bill. I don't know. Never heard a word back from the state.

When I paid the "use tax" for my 150/150 last year, the Washington Dept of Revenue offica had an actual "blue book" of aircraft values. The numbers seemed pretty realistic for the couple of examples I looked up. I'd suggest finding out ahead of time just what they think your airplane's value is, then if necesary document (via vRef or wherever) what the deducts are for all the things wrong with it.
Good luck with them.

I'll be looking at this thread closely as the state of CO will be wanting money from me soon (unless they forget of course )

Let me know what happens Bill.

You can do what others before you have done if your registration is from Aurora for example they dont collect tax on airplanes

mr scout wrote:You can do what others before you have done if your registration is from Aurora for example they dont collect tax on airplanes

El Paso County doesn't either. It is the state that wants some kick back.

Bill..call Ed at Sidney Aviation..he has this "Blue Book" for airplanes as I have had him look up several planes. The State of Nebraska found out that I had bought a new plane from the FAA registration..I know because I asked. Good luck. HC

The one time I am glad I live in Kalifornia. Especially the northern part. Bought out of state and kept it out for most of the first 180 days. No tax.

Tim

qmdv wrote:The one time I am glad I live in Kalifornia. Especially the northern part. Bought out of state and kept it out for most of the first 180 days. No tax.

Tim

Tim, do you know if that works for Idaho? I don't plan to buy another plane soon, but would be good to know for next time.

First do you owe any tax? I live in New Jersey one of the best places to pay taxes. But about 20 years a go the New Jersey tax people figured out that aircraft sale produced a lot of money. The sale of aircraft (sale between 2 private individuals and not a sale from a commercial organization) was considered a casual sale and not taxable. But NJ tax people will send you a tax bill and ask you why you should not pay the tax on your aircraft. The answer that I give them is that AOPA and my tax professional advises me that I do not owe any tax. If you try to read the statue on this it makes no sense. Your local area or state may have the same provision for a casual sale. AOPA could be a good reference for taxation requirements Good luck guys.

Bill, I have been watching this very closely since Aug. I have a close friend at Meadowlake with a 68 cardinal, way past TBO engine, and old VFR avionics (when he bought it). When he got his tax bill form the state, he sent in the vRef and the loan documents showing what he had borrowed to buy and improve his plane. The state said they wanted the bill of sale. He sent that to them; it stated $1.00. Yes, it’s an official bill of sale. The state didn’t like that so they hammered him. They cited every cardinal that was on Controler and TAP at the time. Of course they were citing RGs, “B” models, full Garmin stacks, and low time engines. They used those “comparables” as his tax basis. He copied me on all of his correspondence with the state Department of Rev and it became extremely clear that they don’t understand any of the intricacies that go into figuring out what a particular airplane is worth. In every case, they got the benefit of the doubt.

This is no BS, they actually photocopied the Blue Book highlighted the average 68 cardinal and then in the margin of the book wrote +10%= $43,900. That is how the State justified their bill. It’s supposed to be based on the bill of sale and my friend tried to pay his fair share based on the vRef and loan. So much for standing up and trying to do what is right.

I am expecting the same bill in the spring so I was/have been very diligent in compiling comparables. I don’t mind paying the tax on the money I actually spent to buy my plane
but if the State insists that my 182 is in any way representative of the average +10% I have a history of what similar ones have actually sold for and will be able to point out the significant differences. Ah, the stuff that drives honest people crazy!

Chip

58Skylane wrote:Tim, do you know if that works for Idaho? I don't plan to buy another plane soon, but would be good to know for next time.

If I lived in Idaho, I would know what the rules are for that state.

centennial wrote: He sent that to them; it stated $1.00. Yes, it’s an official bill of sale. The state didn’t like that so they hammered him.

Yes it is an official fill of sale as far as the FAA is concerned. I am sure that the IRS or a divorce lawyer would look at that a little differently. If he had given a copy of a real bill of sale showing the actual sales price along with a copy of a cashiers check, that is what the state would have probably used. I am sure that was not the first $1.00 bill of sale that they have seen.

Tim

The statement sent by the State of Colorado actually states "Do not send the FAA Bill of Sale"

hello

If you take personal property that has already satisfied the tax man and put it into an llc or a corp in Kalifornia, then you do not have to re tax. I will be closing a C type corp in Kal next year and can transfer all the trucks, cars, tools etc to myself personally and pay no sales tax (I think) Not an expet yet, just a prick.

Tim

Thanks for the email flynbeekeeper. I plan on contacting the seller today to see if she can do a "bill of sale". The only thing I have is the "FAA Bill of Sale" which you are correct in that the state will not accept it.

I have no problem with paying the taxes. I knew going into it I would have to pay it and have the money set aside. Its all part of aircraft ownership. From what I have heard so far, the way to go is to provide them with the actually bill of sale as opposed to letting them decide what it is worth.

I guess the lesson learned is to be sure you have good documentation on what you buy. Then, be prepared to prove it.

The hiccup with my friend is this was a non airworthy acft when he bought it. He only has the loan documentation (what he wants to pay the taxes on), FAA bill of sale, and the vRef to go on. I guess he should have gone back to the seller to see if he could get a “better” bill of sale. But it sounds like not getting an official bill of sale from the seller is somewhat common in this business. Can that be right? I don’t know, my perspective is from a sample of 1 and I bought from a broker so have an aircraft purchase sales agreement. But I wouldn’t have known any better if it was Joe Blow in hanger 10. There is still a lot I don’t know. Anyway, I just hope the state accepts my acft purchase sales agreement and not what they think I should pay. I have my doubts reading their correspondence to my friend.

For what it’s worth. I am looking at one of the letters the state sent my friend and it states “Please provide a purchase agreement or bill of sale to establish the purchase price” (no details about the type of bill of sale). The letter is on Department of Revenue letterhead and signed by one of the tax examiners. The previous letter, from another tax examiner, says “Colorado statues are very clear. Taxes are due on purchase price, not the fair market value”. That is a little ironic since the state based it’s figure on the fair market value from TAP, Controller, and then the blue book + 10%. Incidentally, that +10% figure came from the same examiner that said taxes are due on purchase price. Reading over the letters, it’s easy to see how this snowballed and became kind of ugly. In the end, my friend sent a check based on the amount of his loan; no response from the state yet and it’s been two months.

They nailed me here in Utah this year for both my 150 and the 172 I traded for the 175. When it all started they were valuing both of them for about twice what you can insure them for. I had my bill of sales so it wasn't so bad.

I need to go and pay the sales tax for the 175 before the end of the year but when I was dealing with them before they wanted to charge me for the entire purchase price of the 175 and not give me any credit for the trade on the 172. The 172 was in my name and the 175 is in a business so they said that I cant use the trade. I need to go fight with them over that now. Don't you love it?

Jerry

patrol guy wrote:I am walking the tight rope here too. I recently set up a LLC and then put my scout in that. That tripped a tax trigger. Now they want tax. I sent back that no money changed hands and am now crossing my fingers. I also just bought a J3 that I guess I'll owe them for that??

I have a friend that does this and it has worked well for him for years (He's in CO). I was going to try this route, but I didn't purchase a very expensive a/c so I rather just pay the taxes and be done with it. Now if I bought a tricked out C185 it would be a different story.