Maine and it's taxes

[rmciottijr]

Does anyone know if Maine is charging taxes to land in Maine. If so how much?

Thanks,
Bob

 

[Rob Schaffer]

Last I heard Bob, it was if you had been in the state for a period of time within 30 days that they were causing a stink by taxing you. An occasional weekend trip shouldn't lead to this.

 

[alaskaflyer]

"Under a law that went into effect Jan. 1, 2007, MRS can charge a use tax to nonresident aircraft owners whose airplanes weigh less than 6,000 pounds and were purchased in a state without a sales tax, or a sales tax less than Maine’s 5 percent, if it is physically present in Maine for more than twenty days in a year. Now this doesn’t apply to every out-of-state aircraft owner. It applies only to those who purchased their aircraft within the previous 12 months of their visits to Maine. Time spent in the state for maintenance and repair is excluded—but not time spent for business trips or weather delays."

 

[BillTIZ]

"Under a law that went into effect Jan. 1, 2007, MRS can charge a use tax to nonresident aircraft owners whose airplanes weigh less than 6,000 pounds and were purchased in a state without a sales tax, or a sales tax less than Maine’s 5 percent, if it is physically present in Maine for more than twenty days in a year. Now this doesn’t apply to every out-of-state aircraft owner. It applies only to those who purchased their aircraft within the previous 12 months of their visits to Maine. Time spent in the state for maintenance and repair is excluded—but not time spent for business trips or weather delays."

Florida has been doing the same thing...
Now the BIG question is.. are they also collecting tax on all those out of state RVs that are coming to Maine and Florida?

 

[kkoran]

Whether it affects you or not...

Boycott Maine!

 

[SkyHog]

i seem to recall new mexico having a similar law....

 

[wbarnhill]

I just really question all this... You're not a resident of that state, and they could only levy the tax after you left the state (when they realize you went over that 20 day limit)... So they send you a bill. What obligation do you have to pay it? Are other states going to enforce the tax on behalf of Maine through your tax returns or worse, wage garnishment?

I'm just curious how far Maine or any other state for that matter would go to try to force you to pay that tax? And exactly how are they getting the numbers? Are all FBOs supposed to make a note of your N number and send it to the state to figure out when you purchased it? What if you land at a field without an FBO or after the FBOs hours? What if you rent?

Just seems to be full of issues to me... but I'm not a lawyer and I don't condone tax evasion of any kind...

 

[RogerT]

So they send you a bill. What obligation do you have to pay it? Are other states going to enforce the tax on behalf of Maine through your tax returns or worse, wage garnishment?

My guess is they'll file a lien on your plane.

 

[SCCutler]

Not sure about a lien on the plane, but they could certainly enforce the tax by filing suit against you, in Maine, and seeking enforcement of the judgment so obtained in your home state. States are required to give full faith and credit to the judicial acts of other states.

 

[wbarnhill]

Not sure about a lien on the plane, but they could certainly enforce the tax by filing suit against you, in Maine, and seeking enforcement of the judgment so obtained in your home state. States are required to give full faith and credit to the judicial acts of other states.

Ok, that makes sense at least from the "how can they get you" standpoint, but of course my other questions still apply, i.e. how do they get the information in the first place? Plus my underlying "Why is state X taxing you on a purchase made in state Y?" I just really don't like that idea.

 

[astanley]

Ok, that makes sense at least from the "how can they get you" standpoint, but of course my other questions still apply, i.e. how do they get the information in the first place? Plus my underlying "Why is state X taxing you on a purchase made in state Y?" I just really don't like that idea.

While I generally disagree with such things, the logic they are using is to go after the "snowbird" types. They spend a "large" amount of time in state yearly, but avoid paying taxes (aside from property). One could argue that the state is owed a pro-rata share of any use or sales taxes avoided, due to the fact that the owner has essentially imported the product into the jurisdiction for long periods of time. (For example, it's not uncommon to see a certain TV star's G-V parked at BHB every afternoon in the summer, shuttling her back and forth to shoot her show).

Since Maine has particularly onerous taxation on property, sales, and other use cases, lots of people who own non-permanent residential property, in the eyes of the state, escape taxation for something that (justifiably, in the states eyes) should be paid, at least on a pro-rata basis, to the state.

My aunt and uncle own a B&B 100 yards from the ME/NH border. It isn't uncommon for Maine State Police to patrol the neighborhood regularly and nail parked cars, with NH tags on their cars, for spending "too many" nights in ME. Why? Because NH doesn't have sales tax, or use tax, or mandatory insurance requirements.

Cheers,

-Andrew

 

[fgcason]

What happens if you take a plane to one state with the tax then to another state with the tax? Do the states talk to each other or does each one hit you up for the tax? That could get spendy if multiple states started doing the same thing.

I'm guessing this highly suspect underhanded behavior is targeting aviation and doesn't apply to automobiles where the real money would be. But that's probably because they couldn't get it to work since too many people drive..They'd have a huge mob surrounding the state capital with torches and pitch forks if they even thought about the idea.

Taxing across state borders stinks like tuna that's been left out for a week in a hot car.

 

[Lawreston]

my other questions still apply, i.e. how do they get the information in the first place?

This topic is a regeneration of a much longer series of threads from a year or so ago. Re your question(above): Though I don't remember the specifics, I think the more open "gotcha" occurs when out of state "arriving" aircraft are doing so on an ILS plan. Doesn't such have a more "documented" history than VFR arrivals? I may be all wet in that thinking but as I recall . . . . .

HR

Incidentally, Maine also has a use tax law by which any Maine residents having made purchases(without having paid Maine sales tax) via Internet must report any such purcha$e$ when filing Maine Income Tax papers on April 15.

 

[Ghery]

This topic is a regeneration of a much longer series of threads from a year or so ago. Re your question(above): Though I don't remember the specifics, I think the more open "gotcha" occurs when out of state "arriving" aircraft are doing so on an ILS plan. Doesn't such have a more "documented" history than VFR arrivals? I may be all wet in that thinking but as I recall . . . . .

HR

Incidentally, Maine also has a use tax law by which any Maine residents having made purchases(without having paid Maine sales tax) via Internet must report any such purcha$e$ when filing Maine Income Tax papers on April 15.

And we're supposed to do the same thing in Washington. No income tax, just send a check for the "use tax". Nobody does. Heck, I seriously doubt anybody knows where to send the check.

 

[mikea]

What happens if you take a plane to one state with the tax then to another state with the tax? Do the states talk to each other or does each one hit you up for the tax? That could get spendy if multiple states started doing the same thing.

You can reflect those on your tax returns, i.e. in Illinois you can deduct or claim what was withheld by your job in Indiana and Wisconsin and vice-versa so you don't pay both states on the same income

I'm guessing this highly suspect underhanded behavior is targeting aviation and doesn't apply to automobiles where the real money would be. But that's probably because they couldn't get it to work since too many people drive..They'd have a huge mob surrounding the state capital with torches and pitch forks if they even thought about the idea.

Taxing across state borders stinks like tuna that's been left out for a week in a hot car.

You would be wrong, except for the "too much time in our state" part. Illinois will bill you for a car you bought in Wisconsin, and I think a WI border car dealer can even hit you for the IL tax when you buy.


Connecticut had a similar scheme and backed off when the FBOs complained their maintenance business had dropped off the cliff.

 

[gprellwitz]

IL too has a use tax that you're supposed to pay on purchases made from vendors without a "nexus" in IL.

My question has always been more along the lines of what does an owner with a plane on lesaeback do if one (or more) renters go to ME or FL and trigger the number of days threshold? I don't think it's too likely, but it is certainly plausible!

 

[wbarnhill]

IL too has a use tax that you're supposed to pay on purchases made from vendors without a "nexus" in IL.

My question has always been more along the lines of what does an owner with a plane on lesaeback do if one (or more) renters go to ME or FL and trigger the number of days threshold? I don't think it's too likely, but it is certainly plausible!

Exactly! The renter doesn't own the plane, so technically how can the owner be liable for their use? Just a mess, but I'm sure those states would just say "Too bad."

 

[AuntPeggy]

You can reflect those on your tax returns, i.e. in Illinois you can deduct or claim what was withheld by your job in Indiana and Wisconsin and vice-versa so you don't pay both states on the same income


You would be wrong, except for the "too much time in our state" part. Illinois will bill you for a car you bought in Wisconsin, and I think a WI border car dealer can even hit you for the IL tax when you buy.


Connecticut had a similar scheme and backed off when the FBOs complained their maintenance business had dropped off the cliff.

Connecticut taxes annually for personal property if you base your airplane there. The $100 per year was one of the factors we took into consideration before moving the plane to Bridgeport.

 

[kkoran]

What happens if you take a plane to one state with the tax then to another state with the tax? Do the states talk to each other or does each one hit you up for the tax? That could get spendy if multiple states started doing the same thing.

I'm guessing this highly suspect underhanded behavior is targeting aviation and doesn't apply to automobiles where the real money would be. But that's probably because they couldn't get it to work since too many people drive..They'd have a huge mob surrounding the state capital with torches and pitch forks if they even thought about the idea.

Taxing across state borders stinks like tuna that's been left out for a week in a hot car.

They only charge you for the difference between their tax rate and any taxes you've already paid another state. Examples:

1) Buy $200K plane in state w/no sales tax, take it to state w/6% use tax--they'll charge you $12K

2) Buy $200K plane in state w/4% sales tax, take it to state w/6% use tax--they'll charge you $4K

 

[SCCutler]

I don't like this construct, but then again, I never met a tax I liked anyway. Fact is, if you buy something in one place with the intent of bringing it to another, and make the selection of locale based upon taxation rates, you probably owe the tax.

Main problem is, some of these provisions (like Maine's) are overreaching- tag people who are not properly taxable in Maine in the first place.

 

[astanley]

Main problem is, some of these provisions (like Maine's) are overreaching- tag people who are not properly taxable in Maine in the first place.

Devil's advocate here.

But, are they? When is one taxable by a jurisdiction? When does a jurisdiction reserve the right to assess residency-related taxes on you? Given the vacation-oriented nature of Maine, and the summer home crowd, one can see that this gray area offers many people who draw on state resources a loop hole from paying taxes that the state, justifiably, may be owed a pro-rata share on.

Arguably they should stop this use tax crap and just jack up property taxes and be done with it. But, that would kill their low income resident base, and deflate housing values. So...

Cheers,

-Andrew
who hates this tax, and most of Maine's taxes, but enjoys the debate anyways.

 

[ClimbnSink]

My aunt and uncle own a B&B 100 yards from the ME/NH border. It isn't uncommon for Maine State Police to patrol the neighborhood regularly and nail parked cars, with NH tags on their cars, for spending "too many" nights in ME. Why? Because NH doesn't have sales tax, or use tax, or mandatory insurance requirements.

That's got to be great for business. Wonder how many customers the state and businesses lose over that?

 

[alaskaflyer]

Note that this a "use" tax. Not sure that you could characterize Maine as targeting intended residents at all.

 

[astanley]

That's got to be great for business. Wonder how many customers the state and businesses lose over that?

They only hit the residential neighborhoods, parked in driveways and such. And it has to be something like 95% of a month, for 2 or 3 consecutive months.

It's not the best, that's for sure.

Cheers,

-Andrew

 

[SCCutler]

Devil's advocate here.

But, are they? When is one taxable by a jurisdiction? When does a jurisdiction reserve the right to assess residency-related taxes on you? Given the vacation-oriented nature of Maine, and the summer home crowd, one can see that this gray area offers many people who draw on state resources a loop hole from paying taxes that the state, justifiably, may be owed a pro-rata share on.

Arguably they should stop this use tax crap and just jack up property taxes and be done with it. But, that would kill their low income resident base, and deflate housing values. So...

Cheers,

-Andrew
who hates this tax, and most of Maine's taxes, but enjoys the debate anyways.

No reason at all that they cannot do it, it's just a question of policy and politics. Do it too much, and you drive people away.

Their state, their business. Tax too much, some folks will stay away to avoid the tax- others will stay away to avoid the state that opts to tax whether they are taxed or not.

For example: I refuse to spend a dollar in Chicago while Daley is Mayor. In the unlikely event he ever is defeated by a non-crony (he won't die, because you have to be alive, to die), I'll be tempted to book a long and lavish trip there just to show my appreciation.

 

[nyoung]

I read this article this am. It seems that boat/yacht owners are experiencing the same use taxes that we pilot/owners are...

http://www.telegram.com/article/20091227/NEWS/912270625/1002/NEWSREWIND

I wonder what the Freakanomics guys would say about these use taxes. I am sure they bring in some tax revenue, but I wonder if they provide net gain for the State?

There are the costs of the program and lawsuits. Plus the indirect costs of having the wealthy move either themselves or their boat/plane out of State. Then, the vacationing wealthy who might not visit the State because of the concern of use tax...

 

[AdamZ]

One would think that the big aircraft groups AOPA, EAA and the big boating groups what ever they are as well as all the business that they support could ban together and start making some noise. Some of these taxes are insane for example my inlaws had a summer house on Cape Cod. They had to pay a tax on all of their possesions in the house but the same tax did not apply to year round residents. How they got away with that I can't figure out.

 

[SCCutler]

One would think that the big aircraft groups AOPA, EAA and the big boating groups what ever they are as well as all the business that they support could ban together and start making some noise. Some of these taxes are insane for example my inlaws had a summer house on Cape Cod. They had to pay a tax on all of their possesions in the house but the same tax did not apply to year round residents. How they got away with that I can't figure out.

Now, Adam, do they ever rent the place out?

Our little shack down here in the Texas Hill Country was, until we bought it, in the Bed & Breakfast pool, and the contents thus were taxable as business personal property.

I had to provide a sworn statement to the appraiser that the property was not being used for business to avoid paying BPP tax.