Sales Tax Question

Dennis M Carleton said:
PA has a use tax. They monitor FAA registrations. If you have a PA address they will catch up to you. I’m speaking from experience.
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I live in MA; aircraft is in PA. Well aware of use taxes as well -- MA fortunately doesn't have any sales or use tax for aircraft.
 
Many states also require airports to report the N numbers of all aircraft based at a airport.
 
Thunderbird83 said:
Also... in your case, since you say your home state doesn't charge sales or use tax... you can save a step, skip the fly away state. Just have the ferry pilot fly the plane to your home state and do the closing there. You could even ask the owner to fly it, and then put him on a commercial flight home.
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I actually think there's no risk. We pay sales taxes in the states where we live, not the states where we buy. Technically, I can get refunded sales taxes in states where I don't live (but then I owe them in the state where I live - so few people bother). In a large transaction, PA would have no basis to go after you. You neither live in PA nor do you intend to use the plane in PA. I closed on my plane in Georgia but paid the sales tax in Florida because that's where I live and pay taxes. There was a famous case a few years ago where IKEA in New Jersey was advertising that New Yorkers would save sales tax by crossing the Hudson and shopping there but NY quickly reminded people they would come after them
 
Mileage said:
actually think there's no risk. We pay sales taxes in the states where we live, not the states where we buy
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So, if you go to a clothing store in Georgia and buy a $500 suit, you tell them, "I don't live here" and they don't charge you sales tax? No, I don't think you can get a refund.

In your airplane, did you buy it from a private party with no broker? AFAIK, Georgia doesn't tax those if the airplane goes out of state (limited "fly-away" exemption).
 
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midlifeflyer said:
So, if you go to a clothing store in Georgia and buy a $500 suit, you tell them, "I don't live here" and they don't charge you sales tax? No, I don't think you can get a refund.

In your airplane, did you buy it from a private party with no broker? AFAIK, Georgia doesn't tax those if the airplane goes out of state (limited "fly-away" exemption).
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Some states do indeed allow you to file for a refund of sales tax on small purchases if you are a non resident, but ex post facto, not at the cash register. A plane is a different case, however, because the duty to report pay falls to the buyer and the buyer pays tax where they live not where they buy
 
Mileage said:
Some states do indeed allow you to file for a refund of sales tax on small purchases if you are a non resident, but ex post facto, not at the cash register. A plane is a different case, however, because the duty to report pay falls to the buyer and the buyer pays tax where they live not where they buy
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The key word is "some." Depends on the state involved.

The reason for the existence of "fly away" exemptions, which not all states have, is that states can tax transactions taking place within their borders. Same for the sales tax credit against use tax to avoid double taxation - tax in both states. Would not be necessary if the transaction state could not tax the transaction.

There is a broad spectrum of varying state rules on this, although the sales tax credit against use tax may have constitutional underpinnings.

The reason I asked about the broker in yours is one of those variations. Georgia apparently has a limited fly-away tax exemption. It applies to casual sales but not sales involving a buying/selling business like a broker or dealer. The interaction between the Georgia sales tax and the Florida use tax differs depending,
 
Mileage said:
I actually think there's no risk. We pay sales taxes in the states where we live, not the states where we buy. Technically, I can get refunded sales taxes in states where I don't live (but then I owe them in the state where I live - so few people bother). In a large transaction, PA would have no basis to go after you. You neither live in PA nor do you intend to use the plane in PA. I closed on my plane in Georgia but paid the sales tax in Florida because that's where I live and pay taxes. There was a famous case a few years ago where IKEA in New Jersey was advertising that New Yorkers would save sales tax by crossing the Hudson and shopping there but NY quickly reminded people they would come after them
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Sorry, but you're incorrect. You pay "sales tax" in the state where you complete the purchase (unless the state has a fly-away exemption or zero sales tax). You pay "use tax" in the state where you domicile the airplane. You may get credit towards the use tax in your home state if you already paid sales tax in another state, but you certainly won't get a refund of sales tax just because you live out of state. This is why it is critical to understand the tax laws of the state where you close the deal and the state where you will domicile the airplane.
 
Half Fast said:
Sorry, but you’re incorrect. Depends on the two states involved. For example, look at Washington:

State sales tax refund for qualified nonresidents | Washington Department of Revenue

dor.wa.gov dor.wa.gov
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Not the same thing… this link is for sales tax charged at a point of sale on a retail purchase, not sales tax due on an airplane. We aren’t talking about potato chips and candy bars….

Airplanes have special rules in most states. If an airplane sale is consummated in a state that doesn’t impose a sales tax on the transaction, you simply won’t pay. There will be nothing to refund. The buyer darn well should know the rules of the state where the sale is completed and file all required paperwork.

To the OP… you’re getting lots of confusing misinformation on this post. I’m sure you know this, but don’t rely solely on internet advice… make a phone call to an aviation tax accountant.
 
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