Sorry to dredge up an old thread. I just purchased a Kitfox in Colorado and I am trying to figure out how and where to pay sales tax so that I don't get hit with fees, penalties and interest charges. Although there is great info already in this thread, I am striking out when it comes to finding any real documents or information regarding aircraft sales tax in CO. I've crawled all over the website and have tried calling several different numbers that just refer me to the website and not an option to talk to a person. Anyone that has dealt with this recently, I would love to know how you went about paying sales tax. I've gotten advice from, "Wait until they get ahold of you." to "Send in what you think you owe." (to where?) Thanks for any help or advice, I appreciate it.

inflight wrote:Sorry to dredge up an old thread. I just purchased a Kitfox in Colorado and I am trying to figure out how and where to pay sales tax so that I don't get hit with fees, penalties and interest charges. Although there is great info already in this thread, I am striking out when it comes to finding any real documents or information regarding aircraft sales tax in CO. I've crawled all over the website and have tried calling several different numbers that just refer me to the website and not an option to talk to a person. Anyone that has dealt with this recently, I would love to know how you went about paying sales tax. I've gotten advice from, "Wait until they get ahold of you." to "Send in what you think you owe." (to where?) Thanks for any help or advice, I appreciate it.

It isn't well written here in CO, and getting someone knowledgeable on the phone is even harder. Almost everyone that I know who has purchased a plane in the last few years has had a letter show up in the mail sooner or later (up to 12 mo after registration).

Here are a few links that will help:
https://www.colorado.gov/pacific/sites/ ... eral10.pdf
https://www.colorado.gov/pacific/sites/ ... DR0252.pdf

Tax rate may vary if your plane is hangared within the RTD district. You can pay online or mail the form in. If you go through snail mail, call back in a few weeks and request a confirmation letter as they won't mail you back one (for record keeping). Even when you do pay the tax within 90 days, expect a letter to show up again at some point in the future.

Thanks Matt!

Is the general consensus to wait for the letter? I read some horror stories on this thread involving penalties and interest. I'm just try to avoid paying more than my "fair share." Also from what I read it looks as though I have until April 15th of next year. I also read on this thread that it was due on the 20th of the following month of purchase. Thanks.

I got to pay a penalty in IL by playing this game. Not one I would recommend to others.

In the past it was 90 days from purchase, so I just paid it within that time. I hate the thought of paying taxes, but I sleep better knowing when the letter comes I'm covered and don't have to argue with the state about fees and penalties. YMMV

It's listed and described in CO as a "use tax" not a sales tax. That should help your search in addition to the links that Matt posted.

I opted to paid within the 90 day window on my recent 180 purchase.

Thanks guys! I went ahead and paid the tax man. Bummer. At least I won't have to worry about it now.

I got a letter from the local tax assessor the other day asking about my plane. I answered truthfully and am hoping for the best!

Doing some homework here and have a very Colorado-specific use tax question. I live in Denver but rent a hangar in Weld County, which is outside of the RTD/Cultural District. Denver, of course, is in the center of the Colorado Taxation Vortex. The instructions to the return stipulate that you owe the 1% RTD tax and 0.1% Cultural District tax if "the items purchased are used, stored or consumed within these districts." So, does hangaring my plane outside of these districts count? Or, does my residential address (which I need to provide on the tax return form) snag me? What would folks think is sufficient proof that I "use, store, or consume" my airplane outside of these special taxing districts?

Hey Rich,

I've bought three aircraft in Utah and they do scan the database. Here is the beauty of letting them ask you if you bought a plane. When you get the letter from them, they will say, "Hey mister so and so. It appears you may have bought an airplane. If so, here is what we value it at. Please pay this much." Their estimated value was always thousands, nay, tens of thousands less than paid. I usually got the letter 6-8 months after purchase. So, for a minimal late fee charge...I don't think any has been over $100, I'd have to look though...I saved myself and the flying club I used to be in thousands of dollars. The state of Utah was just happy to get a check.

That's weird about them snooping around hangars, but doesn't surprise me. It's a money grab scheme anyway.

Back to Colorado, I bought my first plane from there. I thought the previous owner said something about Colorado not taxing aircraft purchases. It's been nearly 5 years ago though and I can't remember. I just remember wishing I could be a Colorado resident for the day and he didn't have a problem noting the Bill of Sale as $10 + OVC to help hide the paid price...not knowing exactly what the state data mines.


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Hi Cory,

They weren't so friendly with me waiting for them to find out about airplane #4. The letter basically stated "I knew better" and was to pay a significant penalty on top of the additional interest on the sales tax. They were pretty close on what I had paid that time. I can't remember exactically what the penalty value ended up being but it was several hundred dollars over what I would have ended up paying if I had just gone in and taken my medicine. When I bought #5, the 180, I just went in and paid. Didn't like it but slept better at night not wondering when the letter would eventually arrive.

Rich

Man, that stinks. Sorry they dinged you like that. I looked it up and on the last plane their valuation was $14,000 less than paid and the interest was $50 for the time frame between the date it was registered with the FAA and the day I got the letter (11 months).


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Stinks and stings at the same time. It seems they do the search around the end of the year and prepare the letters in January.

Rich

Is there any way to access online whatever "blue book" they use?
At least then you;d have a mark to shoot for, or against, when you prepare your bill of sale.

Shoulda done a Delaware Corporation....Never pay aircraft sales tax again...

Is there an annual property tax due on aircraft in Colorado?

In California we pay an annual property tax to the county where the airplane is hangared. I am moving my Highlander from California to Erie airport next month.

handsrdirty wrote:Is there an annual property tax due on aircraft in Colorado?

In California we pay an annual property tax to the county where the airplane is hangared. I am moving my Highlander from California to Erie airport next month.

My understanding is that we don't have an annual property tax of the nature you describe, but I'm clearly not a tax expert proved by the fact that I'm on here asking for tax advice myself!

Felix wrote:Doing some homework here and have a very Colorado-specific use tax question. I live in Denver but rent a hangar in Weld County, which is outside of the RTD/Cultural District. Denver, of course, is in the center of the Colorado Taxation Vortex. The instructions to the return stipulate that you owe the 1% RTD tax and 0.1% Cultural District tax if "the items purchased are used, stored or consumed within these districts." So, does hangaring my plane outside of these districts count? Or, does my residential address (which I need to provide on the tax return form) snag me? What would folks think is sufficient proof that I "use, store, or consume" my airplane outside of these special taxing districts?

I'll close the loop on my own question for the benefit of the community. A few members were kind enough to PM me with their experience, and the consensus is that you owe tax based on the jurisdiction of the hangar/tie down. Writing a letter with your tax payment describing the situation seems to be sufficient for the authorities.

Felix wrote:I'll close the loop on my own question for the benefit of the community. A few members were kind enough to PM me with their experience, and the consensus is that you owe tax based on the jurisdiction of the hangar/tie down. Writing a letter with your tax payment describing the situation seems to be sufficient for the authorities.

I'd like to see some of those PM's too if someone can enlighten me. I too live in Denver, obviously the plane won't be hangared in Denver itself though - currently on a wait list at Erie Airport, which according to their map is in the Weld County 6.4% district. So no RTD tax, and I'm guessing 6.4% tax (not just 2.9% state), but based on what? Purchase? Magical valuation? Coin flip? I'd also try real hard to make the purchase happen outside of RTD-taxed areas just to cover that base.

Colorado's tax information is cumbersome at best, though I'm sure someone will have no trouble sending me a bill. I'd love to know what to expect from those who've done this here already.

So I've been down this road half a dozen times in Colorado.

6.4% is way too high. It's only state and RTD taxes if applicable. You should be at 2.9%. If your mailing address is inside the RTD district then you will have to send them lease and payment receipts for the hangar that's outside the district.

You can use VREF if you don't want to use your purchase price. Or use the bill of sale, checks, loan docs if you want to use actual sale price.

I have never been able to pay using the website - it always errors out. I either just mailed them a check for 2.9%+ within the period, called them, or I got wacked by them when they found out. They make it very difficult to pay which should be justification for waiving late fees and interest.

This tax burns me up because none of it goes to Colorado aviation and airports - it goes to the general coffers and for RTD to drive empty buses around. I would write the check with a smile if the taxes went to CO airports. With GA declining I'd like to see these taxes either dissolved or pumped back into aviation. Why isn't AOPA pushing for this?

Flymac wrote:Shoulda done a Delaware Corporation....Never pay aircraft sales tax again...

That doesn't work in the state of Kalifornia. If you have any proof it does, please PM me.

PS anyone recommend a Tax attorney experienced with the tax equalization board of CA please PM me also. It has to do with being taxed on an airplane not purchased in CA it was taxed for the full sale price because they think it was. Total BS.