Tax Assessment - OUCH!

kyleb

kyleb

Final Approach
PoA Supporter
Joined
Jun 13, 2008
Messages
9,173
Location
Marietta, GA
Display Name
Drake the Outlaw
Home Airfield
Cartersville, GA
The county where I base my airplanes just tripled their valuation for property taxes. Far above market value, IMO. Anyone ever work this issue? The aircraft are a basic RV-6, a frugally built RV-10, and a Champ project. I have about 5-6 weeks to build my case to push back against this.

It would make sense that the RV-10 is driving the bulk of the valuation (which they didn't break down - mission 1 on Monday is to get their valuation for each aircraft). When I look at TAP, Controller, Barnstormers, what I think I see are a handful of fully optioned RV-10's for big money. We're talking airplanes that are much better equipped than mine and are premium priced probably looking for a buyer who's thinks he's getting a good deal because the equivalent Cirrus costs a million bucks. IMO, those airplanes are in a different market than mine would be.There are also a handful of lower priced -10's, which would be a better starting point.

And then there's the issue that selling prices are private information, so there is limited factual data to work from.

Anyway, I'm looking for advice. I rather doubt the "How 'bout I sell all of it to you at the appraised value?" gambit will work...
 
Got a receipt for the kit or the purchase? Proving actual value is easiest, in my experience.

Otherwise, find an appraiser and have them appraised. Don’t expect them to meet your number; be happy if they do.
 
kyleb said:
The county where I base my airplanes just tripled their valuation for property taxes. Far above market value, IMO. Anyone ever work this issue? The aircraft are a basic RV-6, a frugally built RV-10, and a Champ project. I have about 5-6 weeks to build my case to push back against this.

It would make sense that the RV-10 is driving the bulk of the valuation (which they didn't break down - mission 1 on Monday is to get their valuation for each aircraft). When I look at TAP, Controller, Barnstormers, what I think I see are a handful of fully optioned RV-10's for big money. We're talking airplanes that are much better equipped than mine and are premium priced probably looking for a buyer who's thinks he's getting a good deal because the equivalent Cirrus costs a million bucks. IMO, those airplanes are in a different market than mine would be.There are also a handful of lower priced -10's, which would be a better starting point.

And then there's the issue that selling prices are private information, so there is limited factual data to work from.

Anyway, I'm looking for advice. I rather doubt the "How 'bout I sell all of it to you at the appraised value?" gambit will work...
Click to expand...
Could you use a professional aircraft appraisal/valuation service, like VREF, as a credible assessment to show them?
 
ArrowFlyer86 said:
Could you use a professional aircraft appraisal/valuation service, like VREF, as a credible assessment to show them?
Click to expand...
That's definitely an option, but I hesitate to pay for something like that because when I used to prowl around AOPA's version of VREF, their numbers and <apparent> market information didn't seem to be well correlated. For what it is worth, AOPA no longer has VREF as a benefit.
 
TCABM said:
Got a receipt for the kit or the purchase? Proving actual value is easiest, in my experience.

Otherwise, find an appraiser and have them appraised. Don’t expect them to meet your number; be happy if they do.
Click to expand...
It is pretty easy to find what it cost to build the airplane. The county <seemingly> has valued it at 2-2.5 times build cost. Beyond that, you get into the discrepancy between build cost and market value. I'm sure it is worth more than it cost to build...
 
kyleb said:
That's definitely an option, but I hesitate to pay for something like that because when I used to prowl around AOPA's version of VREF, their numbers and <apparent> market information didn't seem to be well correlated. For what it is worth, AOPA no longer has VREF as a benefit.
Click to expand...
If you don't like the result, you don't have to give it to them. But, "I think you're wrong," isn't going to be convincing. If you think they based the value on dissimilar aircraft, demonstrate that with photos of yours. And you should be able to obtain the basis of their appraisal, including the any comparables they used. A professional appraisal is your best bet.
 
Lindberg said:
If you don't like the result, you don't have to give it to them. But, "I think you're wrong," isn't going to be convincing. If you think they based the value on dissimilar aircraft, demonstrate that with photos of yours. A professional appraisal is your best bet.
Click to expand...
Agree. The ultimate challenge is to figure out what the market actually bears on RV-10's. With a baseline configuration and market value, you can add or subtract options to net something that's at least anchored to fact.
 
kyleb said:
It is pretty easy to find what it cost to build the airplane. The county <seemingly> has valued it at 2-2.5 times build cost. Beyond that, you get into the discrepancy between build cost and market value. I'm sure it is worth more than it cost to build...
Click to expand...

On my first Sonex they sent me an astronomical tax bill and I went to the office to argue against it. I learned that they got their pricing from looking at highly finished models they found on the web.

My last plane was a matter of taking the receipts for the parts to build it. The tax bill was higher than I wanted but much better than I actually expected. So while many folks think airplane owners are rich, the truth is that if they ever were, our great Uncle Sam will help them become less so ...
 
It might make a decent niche business to sell old receipts for Narco and ARC radios, Inop labels, and used oil to smear on the cowl and belly prior to appraisal.
 
IIRC Cartersville is the only airport in Bartow County (who assesses the tax). Have you checked around the airport to see if others are in the same boat and what they are doing?
Can't speak to Bartow, but Cobb made an adjustment for me based on a letter that walked though differences between my plane what was on Controller. Specifically I was able to demonstrate depreciation of avionics - mine were above average, but relatively old. Sounds like you might be able to do similar, but based on the difference between the RV10 and what's on the market.
 
Makes me glad I live in a place that does not Tax airplanes, boats and other toys…I definitely would ask what they would except and set the expectation of using the appeal process. Most taxing authorities, it can end up in court if you want…they hate that part. I have found in the past in person can work, but using formal correspondence with registered mail lets them avoid conflict and often decent results. Best of luck
 
Put the plane up for sale at their price and then show them the lack of interest.
 
kyleb said:
.

Anyway, I'm looking for advice. I rather doubt the "How 'bout I sell all of it to you at the appraised value?" gambit will work...
Click to expand...
I ran into this with a car some years ago in North Carolina. They had “appraised” a 2-year old Ford Festiva at $2K more than I had paid for it new.

I went into the assessor’s office, showed them the original paperwork and window sticker, then asked THEM what a reasonable 2-year depreciation was for a low-price economy car. They backed down instantly without any real argument. The whole process took maybe 10 minutes, max.
 
Hang 4 said:
IIRC Cartersville is the only airport in Bartow County (who assesses the tax). Have you checked around the airport to see if others are in the same boat and what they are doing?
Can't speak to Bartow, but Cobb made an adjustment for me based on a letter that walked though differences between my plane what was on Controller. Specifically I was able to demonstrate depreciation of avionics - mine were above average, but relatively old. Sounds like you might be able to do similar, but based on the difference between the RV10 and what's on the market.
Click to expand...
The assessment came yesterday so I haven't spoken about it with anyone at the airport. I think the approach has to be to identify what their reference aircraft were so I can differentiate.
 
Hopefully they don’t pull the same trick done in Boston (apply a fee on anyone who applied for a revaluation)
 
Daleandee said:
…. our great Uncle Sam will help them become less so ...
Click to expand...

I don’t disagree with you there. Just pointing out Uncle Sam has nothing to do with property taxes.

My dad owned a 38’ Sport Fish boat. The tax man in the town where the boat was berthed sent in a large property bill, so my dad walked into the tax collector’s office in the town we lived in (some forty miles from the salt water) and declared his residence as the taxable location for the boat.

Turns out the resulting bill was a lot less (I’m avoiding the word “reasonable”) and at the time, it was legal. And it was “found money” for the residence town

So consult with your attorney….

-Skip
 
Skip Miller said:
I don’t disagree with you there. Just pointing out Uncle Sam has nothing to do with property taxes.

My dad owned a 38’ Sport Fish boat. The tax man in the town where the boat was berthed sent in a large property bill, so my dad walked into the tax collector’s office in the town we lived in (some forty miles from the salt water) and declared his residence as the taxable location for the boat.

Turns out the resulting bill was a lot less (I’m avoiding the word “reasonable”) and at the time, it was legal. And it was “found money” for the residence town

So consult with your attorney….

-Skip
Click to expand...

To clarify, if it wasn't an uncle it was a cousin that got my money ... I believe his last name was Guvmint. :deadhorse:
 
bflynn said:
Put the plane up for sale at their price and then show them the lack of interest.
Click to expand...

That is near my approach on my first Sonex. They had set the value at an outrageous amount. I suggested that they purchase it from me at half of what they said it was worth. By doing so, I insisted, they would be getting a great deal and I would still come out ahead ... ;)
 
Find an unfinished kit for sale?

Price out the avionics you don’t have with those expensive shops people are complaining about.
 
kyleb said:
The county where I base my airplanes just tripled their valuation for property taxes. Far above market value, IMO. Anyone ever work this issue?
Click to expand...
Same thing just happened to me. I filed an appeal using vREF as my basis. If you have a lender they can run one for you. An insurance agent can as well. No charge if you're their customer. I'll post the results of my appeal here.
 
I remember over 30 years ago I got a tax bill for a boat that was based on a valuation twice what I had paid for the boat. I called the assessor's office and was laughed at when I asked if that was an offer to buy. It would have cost me more money in lost wages than the difference in tax bill, so I just let it go. I got even, I left the state of California and haven't missed it at all.
 
kyleb said:
The county where I base my airplanes just tripled their valuation for property taxes. Far above market value, IMO. Anyone ever work this issue? The aircraft are a basic RV-6, a frugally built RV-10, and a Champ project. I have about 5-6 weeks to build my case to push back against this.

It would make sense that the RV-10 is driving the bulk of the valuation (which they didn't break down - mission 1 on Monday is to get their valuation for each aircraft). When I look at TAP, Controller, Barnstormers, what I think I see are a handful of fully optioned RV-10's for big money. We're talking airplanes that are much better equipped than mine and are premium priced probably looking for a buyer who's thinks he's getting a good deal because the equivalent Cirrus costs a million bucks. IMO, those airplanes are in a different market than mine would be.There are also a handful of lower priced -10's, which would be a better starting point.

And then there's the issue that selling prices are private information, so there is limited factual data to work from.

Anyway, I'm looking for advice. I rather doubt the "How 'bout I sell all of it to you at the appraised value?" gambit will work...
Click to expand...
Put an ad in the classifieds here. Then we’ll all give you lesser offers and snarky answers. Like are you kidding me, that plane ain’t worth anywhere near that. You gotta be fishing for a fool, good luck
 
To close the loop. Since we last discussed this, I got the county's "comps" from the appraisal service they used. Essentially, the appraisal service took the average listed price of RV-6's and RV-10's on Barnstormers, Controller, etc. and based my appraisal on those. Obviously, those were asking prices because nobody has records of selling prices. Ultimately, the appraiser conceded that selling prices are at least 10% off of asking prices in most cases, which was the first step. Then I built a huge spreadsheet doing the plusses and minuses of my aircraft from the reference aircraft and from other aircraft on the market. I didn't do many "extra" RV-6 comps but I did a ton of RV-10 comps. I laid it all out there for them with itemized value adds and deletes based on equipment and condition. Funny enough (and since I was doing the math), the appraisals with the adjustments all pointed to more or less the values I had given the county.

The approach worked. They ultimately agreed to use the value(s) I provided, reducing my property tax assessment by $200K and reducing my property tax bill by about $2K. It is still higher than it was a year ago.

I think the mistake/failure by the appraisal service was a lack of deep understanding of the experimental market. They would have needed to put in real work (hours of it) to create valid appraisals. It may be that they use my model going forward since I basically provided it to them. An unintended consequence, if you will. Hmm.
 
kyleb said:
All states have taxes. Sales, income, property, etc. And they all need similar amounts of $$ per capita to make the trains run on time. The only question is which of your pockets they are sticking their hand in.
Click to expand...
Almost nobody ever gets this.

Here in Florida the governor is talking about doing away with property taxes and everyone is saying how great the idea is. But nobody is saying how they will replace that revenue.
 
donjohnston said:
Almost nobody ever gets this.

Here in Florida the governor is talking about doing away with property taxes and everyone is saying how great the idea is. But nobody is saying how they will replace that revenue.
Click to expand...
I’m hearing a 2% increase in sales tax. IDK
 
donjohnston said:
Here in Florida the governor is talking about doing away with property taxes and everyone is saying how great the idea is. But nobody is saying how they will replace that revenue.
Click to expand...
Connecticut used to have a personal property tax on airplanes, payable to the town where the plane was based. Some years back they eliminated the tax with great fanfare in the name of "tax reduction", and then quietly instituted a required CT aircraft registration sticker with a fee based on gross weight... purchased from and payable the town tax office. :dunno:
 
bonefishpete said:
I’m hearing a 2% increase in sales tax. IDK
Click to expand...

Border tax. Tax every non-Floridian entering the state. We’ll have a surplus.

Heck, if we just had a special fine for improper lane changes on I-4 in Orlando we’d come out ahead. Higher taxes on cannabis dispensaries might be a good idea, too.
 
Some places / states just want more and more money. They waste it on all kinds of things. Some states have genuinely lower taxes all combined, some are through the roof. Just depends on how much they can get, and then waste it on all kinds of things that someone decided was important.
 
Wagondriver said:
Some places / states just want more and more money. They waste it on all kinds of things. Some states have genuinely lower taxes all combined, some are through the roof. Just depends on how much they can get, and then waste it on all kinds of things that someone decided was important.
Click to expand...

Florida, at least, has the option of taxing the snot out of the tourists. It won't even slow them up.
 
There are differences, but not as much as many imagine. It's basically 7-8% for anywhere you would want to live. A point or two more for most places with vibrant economies and jobs. And don't forget that service levels vary also. e.g. Florida has the lowest total burden of any populated state, but most places you would want to live are in the homes in an HOA and have fees associated with that to make up for the lack of government services.

1758317221463.png
 
Last edited:
You must log in or register to reply here.
Back
Top