PDA

View Full Version : Florida Tax trap



Nathan K. Hammond
03-14-2008, 06:42 AM
From ANN this morning....

....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......
http://www.aero-news.net/index.cfm?ContentBlockID=8bab427d-52ff-41f0-981b-eeb629b0b8ae&


My question is; can this effect the Manufacture or only the end-user?

nkh

JP
03-14-2008, 07:56 AM
From ANN this morning....

....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......
http://www.aero-news.net/index.cfm?ContentBlockID=8bab427d-52ff-41f0-981b-eeb629b0b8ae&


My question is; can this effect the Manufacture or only the end-user?

nkh

Nate, Maine has a similar law.

It affects any person that has purchased an airplane, regardless of whether or not they are a resident of the state. All you need to have is presence of the airplane in the state for at least 20 days. "Any person" includes corporate entities. If you purchased a plane and didn't pay tax elsewhere you are going to pay, period.

To the extent that Maine's tax is greater than the tax you paid elsewhere, you pay the difference. Maine's "gotcha" period is one year--which they always toll because they backdate it to the first date of your presence or purchase and dun you immediately. So, the year is illusory in effect.

Maine currently has a bill pending before the state legislature that would eliminate the tax in its entirety, both on parts and aircraft.

If you are a manufacturer of an airplane product and bring an airplane that you own to a state that has a use tax you may very well incur financial liability for tax owed to that state as a result of your presence. A state could certainly argue that once manufacturing is complete you own the airplane until you sell it (just as car dealer's have to buy the cars they sell, although they have cleverly crafted a legislative exemption).

Your best bet is to call a person of authority in Florida Revenue and ask them specific questions. Get them to follow it up in writing, although they aren't responsible for anything they tell you. It only helps in front of a judge in a real courtroom when you appear tax decisions out of the state's hands and into the judicial system.

Maine has four major cases pending. They are going to spend more money defending the cases than the tax brought in last year. There is presently a bill before the Maine state legislature to completely eliminate the tax on aircraft and parts.

It is starting to look like it might pass....

Fortysix12
03-14-2008, 06:44 PM
This brings up another little issue. I'm currently building my supercub. Purchasing parts, paying labor and any associated sales tax along the way. Once you register an aircraft with the FAA in OK they in turn send the respective state notification of the sale. In Florida this would put the state on notice that the sales tax is due. However when building an experimental there is no purchase price and the sales tax was spent during the purchase of raw materials and parts. So wonder how the sales tax issue will be addressed. Guess I could call them.

Tim
03-14-2008, 07:07 PM
46-12
Register the plane in another state. I know that works :lol:

Tim

JP
03-14-2008, 09:00 PM
This brings up another little issue. I'm currently building my supercub. Purchasing parts, paying labor and any associated sales tax along the way. Once you register an aircraft with the FAA in OK they in turn send the respective state notification of the sale. In Florida this would put the state on notice that the sales tax is due. However when building an experimental there is no purchase price and the sales tax was spent during the purchase of raw materials and parts. So wonder how the sales tax issue will be addressed. Guess I could call them.

In Maine they assess you a value based on their "research" and then you can appeal it if you would like. For some reason the values assessed bear no relation to reality....and appeals are expensive. It's a constant fight for any homebuilder.

Fortysix12
03-15-2008, 02:59 AM
This brings up another little issue. I'm currently building my supercub. Purchasing parts, paying labor and any associated sales tax along the way. Once you register an aircraft with the FAA in OK they in turn send the respective state notification of the sale. In Florida this would put the state on notice that the sales tax is due. However when building an experimental there is no purchase price and the sales tax was spent during the purchase of raw materials and parts. So wonder how the sales tax issue will be addressed. Guess I could call them.

In Maine they assess you a value based on their "research" and then you can appeal it if you would like. For some reason the values assessed bear no relation to reality....and appeals are expensive. It's a constant fight for any homebuilder.

That would be double taxation. I've already paid the sales tax on the parts to build the airplane. It is the same reason you don't pay sales tax on a new screened in porch. The contractor pays the sales tax on all the parts of product and pays an income tax based on his business. I guess I will be forced to find out how the my state handles this.

willyb
03-15-2008, 08:02 AM
Fortysix12
Keep all receipts from any tax you paid on parts and materials.Some states are satisfied if you can document paying the tax that way.It is common practice with cars built from kits.

I wonder if we make cub worship our official religion can we apply for tax exempt status? :lol:
Bill

JP
03-15-2008, 08:26 AM
[quote=Fortysix12]This brings up another little issue. I'm currently building my supercub. Purchasing parts, paying labor and any associated sales tax along the way. ......
In Maine they assess you a value based on their "research" and then you can appeal it if you would like. For some reason the values assessed bear no relation to reality....and appeals are expensive. It's a constant fight for any homebuilder.

That would be double taxation. I've already paid the sales tax on the parts to build the airplane. It is the same reason you don't pay sales tax on a new screened in porch. The contractor pays the sales tax on all the parts of product and pays an income tax based on his business. I guess I will be forced to find out how the my state handles this.

Precisely! Remember, Government can do anything it wants...if you let them. Ever wonder why Congress has a retirement program, total health care, paid vacations, etc. and exempts itself from virtually every law it ever makes.... (rant, rant, rant...) :bad-words:

bob turner
03-15-2008, 01:31 PM
Simply registering in another state does not always work. In California, if you are tied down in-state, you will find yourself fighting that and the additional county tax. The really wealthy folks hire an attorney and beat the use tax; the rest of us just pay it.

Patrol Guy
02-22-2009, 04:19 PM
a good quote:

"You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my dear friend, is about the end of any nation. You cannot multiply wealth by dividing it."


~~~ The late Dr. Adrian Rogers , 1931 to 2005, Former Pastor of Bellevue Baptist Church in Memphis , TN ~~~

supercubziggy
02-23-2009, 12:45 PM
I just got hit for the use tax in Kalifornia. Now im getting ready to suck up the county tax too. It is brutal in this state for the small guys. Seems the cut off for a use tax is 90 days. My cub came "in state" during a trial period from 2005-07 where the date was 12months. I brought cubby in after the 90 day period but was unaware of the 12 month change. Purchased in Arizona by a buyer in Alaska, but subject to a nice fat "use tax", cause its on the tarmac in LA. Dad is the legal owner in Anchorage but is healing from a battle with cancer. As soon as hes well enough the cub goes where it should be....