Sales or use tax in COLORADO?

[Michael Gallagher]

What is the rate for a plane purchased out of state for private use in Colorado? I live in Boulder where the general sales tax is 9.045% these days. I see something that says "Property used in space flight: 5.045%" but I am not sure if that is the right one, if it is a one-time tax or if, like a car, there is an annual tax.

 

[Mtns2Skies]

2.9%. Look up "Use tax" which is what aircraft fall under in CO.

 

[codeeno]

Below is what someone sent me in 2017 about CO Aircraft sales/purhcase

Purchase of an aircraft by the user of the aircraft –

• Colorado taxpayers are subject to a use tax if the aircraft is hangered in Colorado

• Colorado taxpayers are not subject to a use tax if the aircraft is hangered in

another state. But, use tax may be due to the other state.

• Taxpayers located in another state are subject to Colorado use tax if the aircraft is

hangered in Colorado



Purchase of an aircraft, no trade –

• The sales or use tax is based on the purchase price of the aircraft



The Colorado (CO) state sales tax rate is currently 2.9%. Depending on local municipalities, the total tax rate can be as high as 11.2%.


Colorado is a “home rule” state. Local-level tax rates in the state of Colorado are quite complex compared against local-level tax rates in other states. Colorado sales tax can be levied at the city/county/school/transportation and SPD (special purpose district) levels.


For sales tax registration, Colorado switched systems in October 2010. According to the Colorado Department of Revenue, all businesses must be using a number known as the new Colorado Account Number, which is eight digits. Numbers obtained prior to October 2010 are seven digits. In order to increase the accuracy of tax records, all businesses with seven digit numbers should add a “0” at the beginning of those original numbers. For example, if your account number was L12-34567-0000, your new number is 01234567.


Companies doing business in Colorado need to register with the Colorado Department of Revenue. In addition, several municipalities require registration for the purposes of collecting sales tax.

http://www.taxrates.com/state-rates/colorado/

 

[mandm]

I don’t get why we have all of these different descriptors when it comes to tax. Use tax? Why isn’t it a sales tax? The govt designs it in a way so people get confused and make mistakes. Sad…

 

[SCCutler]

I don’t get why we have all of these different descriptors when it comes to tax. Use tax? Why isn’t it a sales tax? The govt designs it in a way so people get confused and make mistakes. Sad…

Generally, a “use tax” is a means for a state to capture tax on an asset not subject to the state’s sales tax. So, for example, you bought a plane in a state with no sales tax, then bring it to a state which does have a sales tax. They cannot charge you sales tax, because the sale did not occur in that state - so they assess a “use tax” in an equivalent amount.

 

[murphey]

Colorado - One time charge for tax, not annual.

 

[FPK1]

I avoided paying Use and Sales tax in California by using an Aviation Tax Consultant. Give one a call for a consultation. If you don't have one, try my consultant, Warren at:

Aviation Tax Group
http://www.aviationtaxgroup.com
(916) 930-6141

P.S. I still have to pay property tax because in California an airplane is taxed annually as property.

 

[aggie06]

I don’t get why we have all of these different descriptors when it comes to tax. Use tax? Why isn’t it a sales tax? The govt designs it in a way so people get confused and make mistakes. Sad…

A use tax is paid by the buyer directly to the taxing authority. A sales tax is collected by the seller and remitted on the buyer’s behalf.

 

[jayhawk74]

NH does not have a sales tax while MA does have a sales tax, hence there are a lot of shopping malls in NH located very near to the MA border. When Michael Dukakis was Governor of MA he sent MA State Police to the parking lots of those malls to collect the license plate numbers of cars with MA license plates so the MA DOR could collect user tax from the owners of those cars for what they had bought in NH because technically MA law requires MA residents to pay a user tax on anything that they bought that the hadn’t paid a sales tax on. When NH authorities found out what was happening the NH Governor sent the NH State Police to those parking lots to arrest the MA State Troopers for loitering.

 

[SamSES]

NH does not have a sales tax while MA does have a sales tax, hence there are a lot of shopping malls in NH located very near to the MA border. When Michael Dukakis was Governor of MA he sent MA State Police to the parking lots of those malls to collect the license plate numbers of cars with MA license plates so the MA DOR could collect user tax from the owners of those cars for what they had bought in NH because technically MA law requires MA residents to pay a user tax on anything that they bought that the hadn’t paid a sales tax on. When NH authorities found out what was happening the NH Governor sent the NH State Police to those parking lots to arrest the MA State Troopers for loitering.

NH is one of my favorite states


It’s not too hard to avoid many of these abusive and expensive state schemes when buying a aircraft, just call a tax pro or talk to owners who have done as much