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Unique Situation? Avoiding Sales and Use Tax

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Cardiff Kook

PATRON
Sisters, OR
Death and taxes... I know.

I'm currently a CA resident and am in escrow on a plane in Oregon. Coincidentally, my wife and I are considering moving to Bend, OR for several months. Not to avoid CA sales tax on the plane- it just worked out that way with timing as I actually found the plane while on a trip visiting the area considering a relocation which maybe temporary as we have a house lined up to rent for 5 months. I then stumbled upon a hangar in bend that is open for me.

I'm curious if I take possession of the plane in Oregon, don't bring it back to CA but leave it in Bend, and have an Oregon address will that negate my need to pay CA sales and use tax.

What if I move back to CA in 6 months? Are they going to come after me.
 
I can't say about CA taxes, but most states get a listing of all the aircraft registered to an address in the state each month and will try and track you down. If you register it to the OR address, then likely the OR tax authorities will be looking for their hand out. If registered to a CA address, then CA will want their handout.
 
You need to check with a specialist. It is possible to avoid the use tax, but it may take longer than six months. And it may involve the aircraft not crossing the border during that time. Very strict rules, and they watch.
 
If you move back to CA with it later, you may owe tax on it at that time.
When registering an airplane (or car) when you move to WA, you must show proof of use or sales tax paid somewhere-
otherwise you have to pay the use tax here.
 
Where will you be a legal resident of at the time of sale and where will the aircraft be registered? Likely if you move to Oregon for a brief time then back to California you would have to prove or pay taxes were paid at the time of re-registering.
 
I talked to Julie Alston at Aero and Marine Tax Speicalists with free 30 minute consult and she got it sorted for me. I can avoid the tax assumming the following:

1. I take possession in Oregon and Sales agreeement states so.
2. I register it to Oregon address.
3. For 12 months I keep it out of California (never landing once in CA)

She said if tax board contacts me I need records, including:
1. All receipts for plane/fuel/maintenance etc. during 12 months
2. Hangar receipts
3. Flight logs

She says if I do above I am good to go. If I come back to CA in less than 12 months then sales tax is due.
 
I talked to Julie Alston at Aero and Marine Tax Speicalists with free 30 minute consult and she got it sorted for me. I can avoid the tax assumming the following:

1. I take possession in Oregon and Sales agreeement states so.
2. I register it to Oregon address.
3. For 12 months I keep it out of California (never landing once in CA)

She said if tax board contacts me I need records, including:
1. All receipts for plane/fuel/maintenance etc. during 12 months
2. Hangar receipts
3. Flight logs

She says if I do above I am good to go. If I come back to CA in less than 12 months then sales tax is due.

A key to all is where the plane is registered. If you house/address the plane in one state, that would be the one you are beholden to. Many people keep motorhomes, cars and such down south and live up here- but spend long periods down south. Most of them keep residency up here, so register their vehicles up here.

A number of pilots from south house planes up here, and registered them here.

Alaska has no tax on aircraft.
 
A key to all is where the plane is registered. If you house/address the plane in one state, that would be the one you are beholden to. Many people keep motorhomes, cars and such down south and live up here- but spend long periods down south. Most of them keep residency up here, so register their vehicles up here.

A number of pilots from south house planes up here, and registered them here.

Alaska has no tax on aircraft.


The state of AK doesn't tax the aircraft, but many municipalities do..
 
I can't say about CA taxes, but most states get a listing of all the aircraft registered to an address in the state each month and will try and track you down. If you register it to the OR address, then likely the OR tax authorities will be looking for their hand out. If registered to a CA address, then CA will want their handout.

Looks like Oregon has a $65 registration fee only. California, on the other hand will be after you like the furies from Hell. If you park at a SoCal airfield for more than a few days, then a tax person will come looking for you for a handout. They do NOT understand or care about logic. Avoid registration, tie down agreements etc in CA at all costs. (yes, even a tie down agreement of any kind will generate a tax in CA.)
 
Looks like Oregon has a $65 registration fee only. California, on the other hand will be after you like the furies from Hell. If you park at a SoCal airfield for more than a few days, then a tax person will come looking for you for a handout. They do NOT understand or care about logic. Avoid registration, tie down agreements etc in CA at all costs. (yes, even a tie down agreement of any kind will generate a tax in CA.)

Absolutely correct. 1. Keep all documentation and receipts. 2. Don’t fly to Cali until after 12 months after you bought the aircraft or call the Cali Tax board telling them your intentions so they don’t send you a bill, get it in writing.
It doesn’t matter if it’s registered out of state, purchased out of state, or a Delaware corps. Once some snitch gets your N# (Podunck FBO owner in my case) on any ramp in CA. Expect a full on Tax bill.

I bought an aircraft in California, I had so many days (3 I think)to get it out of there or they’d send me a Sales Tax Bill.
 
When we moved to Washington State the State offers new residents a one time tax free registration, after that you are paying King County for the privilege.
 
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