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sales/use tax RV 9

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kerrjohna(at)comcast.net
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Posted: Mon Aug 07, 2006 8:58 am Post subject: sales/use tax RV 9

recent threads discussed state use/sales tax on homebuilt aircraft.  obviously utah monitors the faa registration.  tax plus interest from the date registration was issued has been assessed. they have assigned a fair market value of $56,900 on the RV9.  The tax levied is $3470.90.

  

 it probably is not worth haggling over the fmv but raising the date from which interest is assessed might be worth a few pennies.

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deuskid

Joined: 18 Feb 2006
Posts: 26
Location: St Louis, MO

Posted: Mon Aug 07, 2006 9:24 am Post subject: Re: sales/use tax RV 9

I wonder why they are assessing tax on the FMV?  It seems to me that they should assess on the purchases to create the aircraft.  They would be taxing you on your labor and I am no expert but that is taxing a 'phatom' purchase.  



I think I would sum up all the invoices [including shipping] to come up with total purchases, less any taxes assessed on those invoices and use that amount as the sales/use taxable amount.  



I do believe they have an argument re: interest.  You should have paid use tax the year you bought the part.  So, sum up the parts purchased by year.  Might be smart to pay use tax each year of build on the parts purchased that year.



John

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slickrock(at)been-there.c
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Posted: Mon Aug 07, 2006 10:04 am Post subject: sales/use tax RV 9

 	  Quote: 	
		   "I wonder why they are assessing tax on the FMV?  It seems to me 

 that they should assess on the purchases to create the aircraft.  

 They would be taxing you on your labor and I am no expert but 

 that is taxing a 'phatom' purchase."


	


------

As the tax commission explained to me, you are right.  It is after all

it is a SALES tax. You can present your case and show receipts/invoices,

and only pay sales tax on what you actually spent (and did not pay sales

tax on).



If you cannot prove you already paid sales tax, or don't have

receipts/invoices, they will then use the FMV.



Now, PROPERTY tax is different and assessed based on FMV.

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rv9ralph(at)flash.net
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Posted: Mon Aug 07, 2006 8:02 pm Post subject: sales/use tax RV 9

Remember there are 2 issues. Property Tax, in CA assessed for FMV by the

county the aircraft is based in and the Sales/Use Tax, assessed by the

state, based on the amount paid for the pieces and parts. 



Below is a post from a local Northern California lister. This

information does only apply to California, however it may be similar in

other states. 

Ralph, Livermore, CA

Wings - Fuse in box - Taxes to be paid upon completion



Subject: RE: [NorCal-rvlist] More Tax questions



Leave it to me to comment on my own question 



I called the BOE (Board of Equalization, the CA state taxing body) today

and here is what they said... If anyone's experience

has been different, please let me (us) know. The woman on the phone gave

me

two choices when it comes to paying the use tax.



OPTION 1) Pay use taxes when the kit is purchased. If this option is

selected, when payment is made, a serial number would need to given to

the

BOE and they will create an account/file. When the plane is eventually

registered (with the same serial number) they will have the prior

payment on

file and tax will not be assessed for items already taxed and paid. Just

be

sure to save copies of all your records/receipts/payments she warned.



OPTION 2) Don't report or pay anything now, but pay it all at once when

the

plane is registered. The registration will trigger a BOE review and

subsequent tax bill.



I was surprised to hear her tell me that in either case, the Use Tax

would

be based on the price paid for the kit(s), NOT the value of the

aircraft.

She confirmed this with someone else in her office and gave me the

example

that if I paid $10,000 for the kit, even though the aircraft might be

worth

$80,000 finished, the Use Tax would only be based on the $10,000 kit

price.

I told her that this is done in stages over years and should I just send

in

additional Use Tax payments as more kits, engine, etc. were purchased.

She

said that if this project is multiple purchases over the course of time,

it

might confuse the BOE, and option #2 above would probably be better. She

reiterated that if option 2 were selected the same would hold true, you

would only be taxed on the purchase price of what you bought, NOT the

value

of the aircraft, again saying they would look at the receipts.



Just reporting what I was told... but please take this with a grain of

salt

and confirm it with the BOE if you need to.

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N941WR

Joined: 01 May 2006
Posts: 21

Posted: Thu Oct 26, 2006 4:32 am Post subject: Re: sales/use tax RV 9

This is an NC issue only but it may apply to you.



Here in NC there is a cap on how much sales tax you can pay on your airplane.



What some builders are doing is to NOT pay sales tax on any of the parts but wait until they are assembled into an airplane and then pay a one time sales tax on the plane, which is capped at $1,500.



Sales tax on $50,000 is $3,750.  So waiting until the end is a significant savings.



We also have the pleasure of paying a yearly property tax here in NC.  I am yet to look into how I can avoid that bill but if it is anything like my car tax.  I might have to sell my RV.

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_________________
Bill

jdisher(at)intergate.com
Guest

Posted: Thu Oct 26, 2006 4:17 pm Post subject: sales/use tax RV 9

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