Second-hand kit purchase issues FL-TX

Don Lewis n FTW wrote:
When he applies for a N number the state money collectors will be alerted

Ahh, I see.

jmk wrote:

In the best case, there is no tax on "occassional sales" between
private individuals within the state. That should be his starting
arguement. However, if he bought it from the factory, then that will
not stand. It's a business-related sale. He can argue the "no tax on
internet sales" issue. That's the next best shot. However, there are
two problems there for anyone living in Texas.

First, a line item was added about 10 years ago that specifically
presumes aircraft to be business property and therefore tax is due. He
will have to prove that he has absolutely no business use for the
plane. [Interestingly, the line item to the tax code doesn't even
allow for proving otherwise. It says if you own your own plane, you
must be using it for business. However, they have no desire to see
anyone fight this in court and will back down if you can prove
otherwise.]

Me and my flying partner own a 172 we bought from out of state from an
individual. The first year of ownership, the county tax assessor sent
us an affadavit to sign that swears the plane is personal use only and
not related to business, which is true, our plane is purely an
expensive toy. We were not charged any sales or use tax. I had presumed
the tax assessor simply discovered our plane when he or his staff
personally visits the airport every January looking for business
aircraft to tax, since the affadavit showed up during the very first
January we owned the plane.


The second problem may or may not exist for any particular individual:
If the individual has any tax certificate in their own name, then any
purchase they make may be deemed by the state to be a business purchase
and tax is due. This means that in theory, since I own a small
business and hold an assigned business tax number in my name (DBA),
that if I give my neighbor $10 for an old tennis racket, it's a
business purchase and I owe use tax. In practice, of course, they only
find out about items during an audit, or big ticket items such as
aircraft and automobiles. Their computer program looks each year at
all autos and aircraft that are newly registered within the state, and
a card stating "you owe tax" will be sent (whether you eventually wind
up owing the tax or not).

My buddy who's building the new RV-8 will probably fall into that
category. He owns a small restaurant and I think it is a sole
proprietorship, not a corp.

I took this off the Illinois tax website:
Tax Rate
The rate is 6.25% of the purchase price or fair market value,
whichever is greater.
If you acquire the aircraft by purchase from a person or business
that is not in the business of selling aircraft at retail, you must pay
tax on the aircraft's purchase price. If the aircraft's purchase
price is less than the fair market value, you must pay tax on the
aircraft's fair market value on the date acquired or the date brought
into Illinois, whichever is later. If you acquire a share of an
aircraft, tax is based on the purchase price or fair market value of
the share acquired. There is no provision for a trade-in allowance
under Aircraft Use Tax. The tax due is based on the fair market value
of the aircraft or share of the aircraft.


I like the words "which ever is greater"