Best / most efficient procedure to buy a bird in CA.

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bluesideup

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bluesideup
Hello everyone.

I would like to get some education / information on:

1-What is the best way to Register? Out of State etc.

2-What is the Use, Buy, Local.. and other taxes may apply?

3-Does having a DBA / registered to a business, intended to use the bird possible Non profit training, low cost for military personal mainly, have any advantages, taxes or otherwise?



Other helpful hints that may help. Possible rent cost for Hangar in French Valley (F70).



The bird would be around $80,000.00, LSA, and I have a good understanding on the Fixed costs, except Insurance.

Any CPA / Attorney that want o help, willing to pay for help, please Email me privately.

Thank you.
 
bluesideup said:
Hello everyone.

I would like to get some education / information on:

1-What is the best way to Register? Out of State etc.

2-What is the Use, Buy, Local.. and other taxes may apply?

3-Does having a DBA / registered to a business, intended to use the bird possible Non profit training, low cost for military personal mainly, have any advantages, taxes or otherwise?



Other helpful hints that may help. Possible rent cost for Hangar in French Valley (F70).



The bird would be around $80,000.00, LSA, and I have a good understanding on the Fixed costs, except Insurance.

Any CPA / Attorney that want o help, willing to pay for help, please Email me privately.

Thank you.
Click to expand...
If you are buying the airplane and will keep it in CA, you are going to have to pay the CA use tax. Doesn't matter where or how you register it.

The CA Bureau of Equalization will send you a tax bill a few months after the registration goes through with the FAA. You can find the current tax assessment on the BOE website.
 
Just go catch ya one in the wild, they're everywhere.

upload_2016-11-15_15-38-28.png upload_2016-11-15_15-39-12.png
 
bluesideup said:
Hello everyone.

I would like to get some education / information on:

1-What is the best way to Register? Out of State etc.

There is no "State registration" for aircraft in California. You register with the FAA.

2-What is the Use, Buy, Local.. and other taxes may apply?

Sales tax (State), Property tax (County.) And they will find you to assess property tax.

3-Does having a DBA / registered to a business, intended to use the bird possible Non profit training, low cost for military personal mainly, have any advantages, taxes or otherwise?

No tax advantage to a business ownership over individual for non-commercial ops. You can write off business travel expenses, with some restrictions. You can write off training expenses and a certain percentage of capital costs if you primarily use the aircraft for business. Probably hard to justify for an LSA though.

Other helpful hints that may help. Possible rent cost for Hangar in French Valley (F70).



The bird would be around $80,000.00, LSA, and I have a good understanding on the Fixed costs, except Insurance.

Any CPA / Attorney that want o help, willing to pay for help, please Email me privately.

Thank you.
Click to expand...

My two cents.
 
Fearless Tower is right - you'll be hit for the CA Use Tax. It WILL happen a few months after FAA registration. Alternatively you can purchase and maintain your aircraft in another state and pay that state's tax, but you can't keep the aircraft here in the California for more than 6 months (I believe) without having the CA Use Tax imposed. If you happen to be an AOPA member, you can call them and they can give you some guidance.

Good news is in French Valley there's a mechanic that works on Light Sports and is a Rotax mechanic (in case the plane you're buying uses the Rotax.)
 
Avoiding sales tax in CA is simple. Just get a charter certificate and... :)
 
Hello everyone.
Thank you for the responses.
I know, and I am not trying to avoid, all the Charges in CA.
I am trying to get a good grasp of what the overall costs are. I expect some will depend on the County, but as I understand mostly is the State?
I would estimate that, as an approximation, I will be looking at an additional 10% of the original purchase price, for other charges per year?
The deductions, depreciation, expanses seem to be very difficult to estimate. I will not be using it to get any new ratings / training for myself, but the question is will anything be deductible, will anything offset the overall costs?
I did read the Sac's response and as I expected this would be something that will always be difficult to estimate / understand, at least it is for me.
 
Bluesideup - I think CA use tax is 6%. Not sure - check with me in a few months and I can tell you when the State catches up to my partners and myself. You may want to talk to your CPA regarding depreciation and write-offs. Since my aircraft is a partnership with 2 other individuals, we put it under a LLC, and we'll pass through the straight line depreciation to each of the partners based upon percentage contribution. But then again, check with me in a few months and I'll tell you what my CPA thinks of that idea.

I think if you're figuring for 10%, that should cover you for the tax liabilities. I'm guessing tie-down is around $150-200 a month, and maybe a hangar at $500 a month. You'll want to add the cost of an annual inspection (figure about $1000 to be safe), and depending upon the number of flight hours, oil changes on the aircraft. (If using a Rotax and burnging 100LL, you'll change at 50 hours, if using MOGAS, then it's 100 hours.) Add a buffer for aircraft miscellaneous bits and wear items (tires, brakes) and protection (cover, prop cover), and that should get you somewhere close to a budget starting point.
 
The California tax are a use tax and property tax. The use tax is basically a sales tax. You pay it one time when you buy the plane. After that there is an annual property tax that is much, much less. The rates depend on your county where the plane will be based.

I paid $55,000 for my plane and at the time I lived and based the plane in Oakland. The sales tax rate there at the time was 9.75 percent and so that it is what I paid for "use tax". $5363.00 After that, the county where you live will send you an annual condition report to fill out. Basically, you tell them your hours on the plane and engine and any upgrades you have done, or any damage done as well as over all condition of paint, interior and all the avionics. They then value your plane based on market trends and come up with a value and multiply that value by a modifier that depends on which county you live in. Their assessment has been pretty fair and reasonably accurate in my mind as to its market value so far.

I have paid between $930 to $570 so far. I moved counties which helped a tiny bit and the tax has trended downward as it gets older with higher hours and no improvements. The highest was after I spent a bunch of money and redid my panel. If you buy a plane that qualifies as an antique in the eyes of California, you can publicly display it at a public event, in a museum, or open hangar day at your field at least I think 10 times a year and get the property tax waived. I'm fuzzy on the details right now because I don't participate even though my plane qualifies.

Yes, it's California and we pay higher taxes than some states. It is the unfortunate fact of living and enjoying this state. If you don't want to pay the taxes, you'll have to move to somewhere more miserable. Voting won't help. We are pretty much solid blue and talk of tax reform, or lowering taxes makes you an ignorant red neck. I know, I've tried.
 
I paid $8k in sales tax for an $85k plane in CA in 2014. The yearly use tax is under $1,000. ($800, I think. The accountant handles it. I'm not good with money.)
 
Hello everyone.
Thank you for the feedback.
It is about what I anticipated, in addition to the fixed costs, Maintenance, Storage, and Insurance, in CA, taxes, and other charges, will be around $6-8,000.00 per year for bird around 80K.
I know, CA is the odd one out, and a couple of others,and if it would not be for the Wx most of the decent people would not stay there.
 
bluesideup said:
Hello everyone.
Thank you for the feedback.
It is about what I anticipated, in addition to the fixed costs, Maintenance, Storage, and Insurance, in CA, taxes, and other charges, will be around $6-8,000.00 per year for bird around 80K.
I know, CA is the odd one out, and a couple of others,and if it would not be for the Wx most of the decent people would not stay there.
Click to expand...

No. It's not that high. Your first year will cost you that much for the use tax, but the property tax bill is much, much lower. Closer to 1%.

So, as soon as you buy your $80,000 plane you will pay about a $6800 use tax. The actual amount depends on your county and city and you can find the rates at boe.ca.gov . You don't pay property tax in the first year. The property tax is based on wherever the plane is located on January 1st of the following year. So if you buy a plane this year, you won't owe property tax until next year.

Then in year two you'll pay about $800 and going forward as long as you don't do significant upgrades to the plane, this amount will lower each year. It sucks, but it's not that bad.
 
bluesideup said:
Hello everyone.
Thank you for the feedback.
It is about what I anticipated, in addition to the fixed costs, Maintenance, Storage, and Insurance, in CA, taxes, and other charges, will be around $6-8,000.00 per year for bird around 80K.
I know, CA is the odd one out, and a couple of others,and if it would not be for the Wx most of the decent people would not stay there.
Click to expand...
There's more to life than nice weather.
 
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