What determines sale location? (sales/use taxes)

On May 25, 6:49 pm, "Douglas Paterson"
wrote:
I'm sure the experienced buyers & sellers around here have run into this
before....

One prospective plane I'm looking at is for sale in Connecticut (currently
based there). The current ownership is in a Delaware LLC (of a sole
proprietor, who is flying/basing the plane out of CT). Connecticut has 6%
sales tax that apparently applies to even "casual and isolated sales" of
aircraft; Delaware has no sales tax. I'll leave it as an exercise for the
reader to decide which I find more appealing....

So, "where" does this airplane sale take place? Is it wherever the keys get
handed to me? Is it DE, since that's where the owning entity exists? CT,
since that's where the plane's based? Whatever we write in a purchase
agreement?

Separate but related question: Colorado is where I live--BUT, I'm here on
active duty military orders, and my official state of residence is Oregon.
It says so in my military records, any state income tax purposes are with
OR, my motor vehicles are registered in OR, I have an OR driver license, I
vote in OR. I've read AOPA's discussion about Soldiers' and Sailors' Relief
Act *not* applying to aircraft based in the state of assignment, but I
wonder if that's the whole story? Does anyone know more details on that,
ways to avoid paying CO's 2.9% "use" tax (what a crock!), etc? 2.9% sure
beats 6%, but it's not nearly as good as the 0% that OR would want. Is
there some way to register my plane in OR and avoid CO's sticky fingers? I
haven't paid sales taxes on any sort of big-ticket item before, except for
the time I was foolish enough to register a car in Florida--this is killing
me!!

Any magic bullets?? I seem to recall the discussion here a couple of weeks
ago concluded that there's no advantage to an LLC ownership construct for a
single person & personal use (i.e., me)--would that help me here at all?

As usual, thanks for any help or advice!
--
Doug
"Where am I to go/Now that I've gone too far?" -- Golden Earring, "Twilight
Zone"
(my email is spam-proofed; read the address and make the appropriate change
to contact me)

For the purpose of "use tax" where the sale takes place (or where you
residence is) makes no difference. If you bring the plane into the
state to keep it there (with a few exceptions) you owe "use tax".
In many states (certainly in California (what I know)) you can put
your LLC anywhere in the world you want but if the LLC does *ANY*
business or holds any assets physically in California, you owe $800/yr
in franchise tax on the LLC (not even counting the airplane).
I guess I only know California though, check your local state for
"franchise tax" on the LLC.

-Robert

"Robert M. Gary" wrote in message
ups.com...

For the purpose of "use tax" where the sale takes place (or where you
residence is) makes no difference. If you bring the plane into the
state to keep it there (with a few exceptions) you owe "use tax".
In many states (certainly in California (what I know)) you can put
your LLC anywhere in the world you want but if the LLC does *ANY*
business or holds any assets physically in California, you owe $800/yr
in franchise tax on the LLC (not even counting the airplane).
I guess I only know California though, check your local state for
"franchise tax" on the LLC.



Robert:

Thanks for the thoughts. I think, though, that you may have confused my 1st
& 2nd questions. Assuming there's nothing I can do to avoid CO's _use_ tax
(grrrrr), it's still well worth my while to structure the sale (if legally
possible) to avoid CT's _sales_ tax (because it's 3.1 percentage points
higher than CO's _use_ tax). In that case, I think where the sale takes
place DOES make a difference--no??

As to the _use_ tax, sad to say that I think you're correct that I'm stuck
there. Seems like, even if I'd bought a plane years ago, they could sock
that to me upon moving to the state. Gotta love the language: it's a tax
on the "privilege" of the use of personal property. Enjoying the use of
legally acquired property [paid for with after-tax dollars outside of the
state, I might add] is a "privilege," eh...? Grrrrr.... I suppose I
should be thankful that the tax collector's not in my house inventorying my
furniture, clothes, computer, and everything else, since the language
certainly includes all personal property!

--
Doug
"Where am I to go/Now that I've gone too far?" -- Golden Earring, "Twilight
Zone"
(my email is spam-proofed; read the address and make the appropriate change
to contact me)