Sales tax on MI airplane purchase

Discussion in 'Hangar Talk' started by martym, Mar 20, 2018.

  1. martym

    martym Pre-takeoff checklist

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    Any MI residents purchased a plane lately? Regarding sales tax, the MI dept. of Treasury webpage says for a "non-qualifying" sale Form 1989 must be submitted which requires "a detailed bill of sale that substantiates the purchase price and the condition of the aircraft at the time of purchase" without anymore specifics.

    Wtf? If the sales tax rate is 6% what difference does it make if it's a POS or freshly restored? The form also states an FAA BoS is not acceptable to substantiate purchase price. But a hand written BoS on a paper towel with no notary or witness is apparently okay as long as it meets the requirements stated in paragraph 1?

    Before I call the tax office and ask a lot of questions, wondering what they normally accept.

    If it's anything like a motor vehicle, the girl at the SOS office insisted that I bought the car from a relative while nodding her head yes. So I nodded in unison and all was good???
     
  2. cowman

    cowman En-Route PoA Supporter

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    I can't speak for MI but IL and WI will just accept a copy of your bill of sale. I expect if you send in that, their form, and give them their money they probably won't argue with it. YMMV but usually they just want your money and as long as the amount doesn't look way to low they're probably not going to question it.
     
  3. sourdough44

    sourdough44 En-Route

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    I bet if you include some bill of sale, and the 6%, they won’t chase you around. Never had a problem here in WI, just some BoS and the $$. They did have some limit on how long you are given to pay and register the plane with the State.
     
  4. Capt. Geoffrey Thorpe

    Capt. Geoffrey Thorpe Touchdown! Greaser! PoA Supporter

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    The don't want the FAA BOS because people often list $1.00 on the FAA document. IIRC I sent in a copy of the cashier's check or perhaps the sales agreement showing the total price, or both. Whatever I sent, they were happy with it.
    They also tell you that they will make an assessment of the value and charge you if they think the airplane is worth more - that's why they want the condition.
    Then, a few months after you send in your sales tax, they will find out that the airplane was registered in Michigan from the FAA and will send you a letter telling you that you owe the sales (or is it use?) tax - but the form has a place to check "Already done paid that you morons" (I may be paraphrasing that a bit). So, keep copies of everything. Everything. (I sent them a copy of the check I wrote for the tax when I returned this form) I They also want an explanation of what the aircraft will be used for. I put down "to go flying". WTF?
     
  5. Capt. Geoffrey Thorpe

    Capt. Geoffrey Thorpe Touchdown! Greaser! PoA Supporter

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    Oh - found the form MI sent months after I had already paid the sales tax- they want copies of the tax forms that you already sent them along with the "detailed bill of sale that substantiates the condition of the aircraft at the time of purchase and the purchase price" and wanted a copy of an appraisal if one had been made.
     
  6. martym

    martym Pre-takeoff checklist

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    Which was my point, why report condition since they always have the option to override it. I'm sure if I say it's in excellent-mint condition they will come make an assessment to make sure I am not exaggerating condition and that the plane is not actually worth less.......:rolleyes:
     
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  7. MauleSkinner

    MauleSkinner Touchdown! Greaser!

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    Report it as "airworthy ".
     
  8. bgmac

    bgmac Pre-Flight

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    I guess TN is pretty easy. They just ask how much I payed and they tell me what to pay. No bill of sale needed.
     
  9. tawood

    tawood En-Route

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    I had my mechanic write a statement for mine...and he said, it depends on what you are buying/registering: registering a Cessna 150? They won't give you much problem if you say $10k. Registering a two year old Cirrus? They are going to require more than just you saying you paid $320k.
    And in Michigan, just because you "got a deal" and paid less than value, doesn't mean you are taxed for what you paid...you are taxed on what its worth. (Your goal is to convince them you overpaid).
     
    Last edited: Mar 21, 2018
  10. Sundancer

    Sundancer En-Route

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    Time to move.