Sales/Use Tax

[Aztec Driver]

I recently purchased an aircraft from an individual in another state and now need to pay the use tax on it. I purchased it in my own name, because having it in a corporate name would not have helped anything at the time. I now have an interested partner to invest in it with me. I would like to set up an LLC for the aircraft and transfer the ownership to that. Several questions come to mind.

1. Would it be necessary to pay the use tax now on the original purchase?

2. Do I have to "sell" the aircraft to the LLC in order to transfer the Title?
a. If so, can I sell it for $1.00, so I don't have to repay the entire tax amount?

3. Would you pay the tax voluntarily, or wait until they send a bill?
a. Is that bill likely to come around soon, or is it likely to come around a lot later and include lots of penalties?

 

[Dean]

Every state is different, so I can't help you much. The only thing I can tell you is that Delaware has pretty good LLC or Corp laws. I am in the process of doing a LLC there now. No tax on the aircraft and you don't have to live there to have the LLC.

 

[Ken Ibold]

3. Would you pay the tax voluntarily, or wait until they send a bill?
a. Is that bill likely to come around soon, or is it likely to come around a lot later and include lots of penalties?

Once when I bought an airplane I called the state and asked how to pay the sales/use tax. They said, "oh, the easiest thing to do is just wait until we send you a bill." Four months later I got a bill, and it included penalties. I called 'em up and before I even asked they waived the penalties.

 

[Ken Ibold]

Every state is different, so I can't help you much. The only thing I can tell you is that Delaware has pretty good LLC or Corp laws. I am in the process of doing a LLC there now. No tax on the aircraft and you don't have to live there to have the LLC.

But the state in which you DO base the airplane will levy the use tax. The DE corp will not assist a sales/use tax dodge in any way.

 

[Dean]

But the state in which you DO base the airplane will levy the use tax. The DE corp will not assist a sales/use tax dodge in any way.

I am talking PPT not sales/use tax. There are several aircraft owned by DE LLCs, but leased back to MO residents/businesses and based here. No tax is paid on the airplane here. One that comes to mind was the Twin Otter that crashed here last July, it was based here, but owned by a DE LLC.

 

[SCCutler]

I am talking PPT not sales/use tax. There are several aircraft owned by DE LLCs, but leased back to MO residents/businesses and based here. No tax is paid on the airplane here. One that comes to mind was the Twin Otter that crashed here last July, it was based here, but owned by a DE LLC.

Sigh. (c., Dr. Bruce) Here we go again.

This is a myth.

Simply holding title to property in another state does not engage the tax cloaking device.

If you base your aircraft in a state / county in which tax is collected for personal property, the tax is still due.

If, by virtue of the aircraft being registered to an out-of-state entity, you avoid detection for awhile, you'll eventually discover the concept of interest and penalty.

Incorporating in a state other than your own (including, but not limited to, Delaware or Nevada) simply means that you have a foreign corporation, but it is still subject to the same tax laws. Only *now*, you have two states to report to- the state where you base, and the state where you incorporate.

The only beneficiaries of Delaware (or Nevada) incorporation of entities operating in another state, are the tools who convince you to do it and who take your money.

 

[AirBaker]

I recently purchased an aircraft from an individual in another state and now need to pay the use tax on it. I purchased it in my own name, because having it in a corporate name would not have helped anything at the time. I now have an interested partner to invest in it with me. I would like to set up an LLC for the aircraft and transfer the ownership to that. Several questions come to mind.

1. Would it be necessary to pay the use tax now on the original purchase?

2. Do I have to "sell" the aircraft to the LLC in order to transfer the Title?
a. If so, can I sell it for $1.00, so I don't have to repay the entire tax amount?

3. Would you pay the tax voluntarily, or wait until they send a bill?
a. Is that bill likely to come around soon, or is it likely to come around a lot later and include lots of penalties?

Taxes... this should be a topic for the spin zone... ERRR

Don't get me started...

 

[tonycondon]

gets me riled up too. i think i had to pay 3-400 dollars last year to pay taxes and register the glider with the state. supposedly it pays for the state aviation infrastructure of which my glider uses none.

thanks though, this thread reminds me to see if that is a yearly renewal, i hope not.

 

[Aztec Driver]

Thanks, folks, I do know I must pay the tax. I am not trying to avoid that. My question involved the changing of name status. And, no, this topic has not been discussed in quite this manner before.