Buying a CA plane and Keeping in Tx

[Tex_Mike]

I live in Texas and am looking to purchase a plane currently in California. Does anyone here have experience dealing with sales tax in a scenario like this one? Am I only looking at Texas sales tax or does the state of California want some of my money as well?

I am thinking of taking delivery in Oregon which should help with the Texas taxes but this is something I am still looking into.

 

[AggieMike88]

One of the good Texas based resources for questions like this is Wayne Bower (wabower on this board). He assists with aircraft acquisitions of all sizes for both private persons and small, mid, large corporations and knows all of the ins and outs of Texas' sales and use tax when it applies to aircraft purchases.

 

[rpadula]

California always wants money.

 

[SCCutler]

Texas has an "Occasional Sale" exemption; if the seller (1) has sold no more than two (if I recall correctly) aircraft in the last year, and (2) does not hold a Texas Sales and Use Tax Permit, and you also do not hold a Texas Sales & Use Tax Permit, you should be able to buy the plane with zero (none) sales or use tax.

You just need to be sure that, when you buy the plane, you get a Statement of Occasional Sale form signed by the Seller. You keep this in your files (it is not sent to the state), and produce it IF you are asked to pay sales/use tax. In my experience, about a 5% chance you will, more if you are at a busy airport and/or it is a very high value plane.

I attach a copy of the Form (01-917), as well as the applicable section of the Texas Administrative Code (Rule 3.316).

No need to jump through hoops!

 

[SCCutler]

One of the good Texas based resources for questions like this is Wayne Bower (wabower on this board). He assists with aircraft acquisitions of all sizes for both private persons and small, mid, large corporations and knows all of the ins and outs of Texas' sales and use tax when it applies to aircraft purchases.

...or, you could ask a lawyer who practices in Texas and has litigated with the state Comptroller's office over this issue...

Wayne knows all this stuff better than I do, actually, but I believe he will endorse what I have written above.

 

[AggieMike88]

Texas has an "Occasional Sale" exemption; if the seller (1) has sold no more than two (if I recall correctly) aircraft in the last year, and (2) does not hold a Texas Sales and Use Tax Permit, and you also do not hold a Texas Sales & Use Tax Permit, you should be able to buy the plane with zero (none) sales or use tax.

A clarification question for ya....

I have a Texas Sales Tax number for my small biz (a "C" corp) and collect/remit sales tax for items purchased by my customers. Does this "disqualify" me based upon the emphasized text?

 

[Tex_Mike]

Wayne reached out to me on an earlier post. Sounds like a good time to give him a call.

 

[AggieMike88]

Even better if you can go for a ride in his Skywagon. It's a very nice example of the type.

 

[Fearless Tower]

I live in Texas and am looking to purchase a plane currently in California. Does anyone here have experience dealing with sales tax in a scenario like this one? Am I only looking at Texas sales tax or does the state of California want some of my money as well?

I am thinking of taking delivery in Oregon which should help with the Texas taxes but this is something I am still looking into.

Recently went through a similar deal - As long as you are taking delivery in Oregon or any other state for that matter, CA will have zero claim for any use/sales tax. However, they still can (and because the state is so f'ng broke) they very well may still try to come after you up to 8 years later. As long as you are dotting all of your i's and crossing your t's, you will in an excellent position to tell the fine state of Mexifornia to pound sand.

Bottom line is that if you are dealing with a California airplane, it really is worth the time and money to contact an aviation tax professional and make sure you follow their specific instructions for how to take delivery so that CA can't get a dime of your money. There are lots of little stipulations involved, for example, you must not pay a dime for the cost of transporting the aircraft to the delivery spot and you must not be inside the aircraft while it is travelling outside of CA.

 

[airguy]

A clarification question for ya....

I have a Texas Sales Tax number for my small biz (a "C" corp) and collect/remit sales tax for items purchased by my customers. Does this "disqualify" me based upon the emphasized text?

Would only apply if you registered the airplane under your "C" corp as a business asset. Personal assets are separate.

 

[AggieMike88]

Would only apply if you registered the airplain under your "C" corp as a business asset. Personal assets are separate.

Thanks. I do plan on keeping it separate.

 

[danhagan]

Texas has an "Occasional Sale" exemption; if the seller (1) has sold no more than two (if I recall correctly) aircraft in the last year, and (2) does not hold a Texas Sales and Use Tax Permit, and you also do not hold a Texas Sales & Use Tax Permit, you should be able to buy the plane with zero (none) sales or use tax.

You just need to be sure that, when you buy the plane, you get a Statement of Occasional Sale form signed by the Seller. You keep this in your files (it is not sent to the state), and produce it IF you are asked to pay sales/use tax. In my experience, about a 5% chance you will, more if you are at a busy airport and/or it is a very high value plane.

I attach a copy of the Form (01-917), as well as the applicable section of the Texas Administrative Code (Rule 3.316).

No need to jump through hoops!

Did this myself as I live in Texas but plane is based in NM 5 miles away. You have to do it at time of sale.

 

[airguy]

Did this myself as I live in Texas but plane is based in NM 5 miles away. You have to do it at time of sale.

They let us do it 3 months after the fact when we bought our 172 in Maine, but that was 2 years ago.

 

[david.h]

Next month is 2 years ownership for a TX to TX transaction, we got the Ocassional Sale documents signed and unless someone comes knocking in the next 2 weeks I believe we'll fall into the 95% who never needed to show it to anyone catagory. Hope you can find a way to make use of this Ocassional Sale, sure was a life saver in the wallet.

 

[N747JB]

Next month is 2 years ownership for a TX to TX transaction, we got the Ocassional Sale documents signed and unless someone comes knocking in the next 2 weeks I believe we'll fall into the 95% who never needed to show it to anyone catagory. Hope you can find a way to make use of this Ocassional Sale, sure was a life saver in the wallet.

I bought my 414 from an individual in TX 5 years ago, no tax due in Georgia, casual sale. The seller had transferred it from a corporate name earlier and IF I had bought it from the corporation, I would have owed tax in Georgia. So, make sure you cover that if that applies in Texas.