Just Bought A Plane? STAY OUT OF FLORIDA !

"I don't think there is any argument whatsoever here. Florida sees the
aircraft entering Florida as "use" of Florida (air) facilities, not a
"sales" tax on the transaction."

This is not at all correct. "Use tax" has a specific legal definition, which
doesn't refer to the "use" of a specific something.

In the context being discussed, the use tax is the amount of sales tax that
would have been collected on the transaction if it had occurred in Florida,
minus the amount of the sales tax (if any) collected by another state.

This same type of tax is frequently collected when one changes an automobile
registration from one state to another.

The purpose of these types of taxes is to prevent someone from purchasing a
big-ticket item in a low tax state, then registering/using it in a high tax
state.

Assume you live in State 'A', which has a sales tax rate of 10%. If you
bought an airplane for $100,000 in State 'A' and kept it there, you would
pay $10,000 in sales tax to State 'A'.

But if you went to State 'B', which has a sales tax rate of 5% to buy the
$100,000 airplane, you would pay $5,000 in sales tax to State 'B'.

However, if you bought the airplane in State 'B' and begin keeping/using it
in State 'A', State 'A' would then charge you a "use tax" of $5,000, or the
difference between the $5,000 sales tax you paid to State 'B' and the amount
the tax would have been had you purchased the airplane in State 'A'. Again,
this is to prevent residents of State 'A' from buying big-ticket items in
other states in order to avoid the (high) sales taxes in State 'A'.

This whole thing is nothing more than someone incorrectly interpreting some
very common tax regulations. From some of the posts I have read here and
elsewhere, this interpretation may be a deliberate attempt to create panic.

But Florida will no more try to impose a use tax if you fly your airplane
there for a two week vacation than they would if you drove your car there
for a two week vacation.



"WJRFlyBoy" wrote in message
. ..
On Tue, 01 Apr 2008 12:28:45 -0500, Jim Logajan wrote:

http://www.fata.aero/news.asp?news_id=88&display=yes

So basically he wasn't charged any sales or use tax. That is not what the
A.N.N. story claimed. The Cirrus owner simply assumed that the advice he
heard over the phone was valid and canceled his plans.

This Cirrus owner and the Cirrus owner in the OP are not necessarily the
same person/plane.

Here's FDOT's position paper on the matter.

http://dor.myflorida.com/dor/taxes/s...aft_owner.html

I don't think there is any argument whatsoever here. Florida sees the
aircraft entering Florida as "use" of Florida (air) facilities, not a
"sales" tax on the transaction. They clearly state they do ramp checks.

Does this mean Sun n Fun attendees are liable for use taxation? Sure
does. Does this mean that there is a likelihood they will be taxed? I
don't see the likelihood at all.

On 2008-04-01, news.chi.sbcglobal.net wrote:
But Florida will no more try to impose a use tax if you fly your airplane
there for a two week vacation than they would if you drove your car there
for a two week vacation.

Unfortunately, they claim they can. From the FDoR page on sales and use tax,
http://dor.myflorida.com/dor/taxes/s...aft_owner.html :
-----
What Is Use Tax?

Use tax is a component of Florida's sales and use tax law. It is due on
purchases made out of state and brought into Florida within 6 months of the
purchase date.

The "use" component of sales and use tax provides uniform taxation of items
such as aircraft, which may be purchased outside Florida, but used,
hangared, or stored in the state.

Aircraft purchased and used outside Florida for more than 6 months are
generally exempt when brought into Florida, if both of the following
conditions are met:

The owner has owned the aircraft for more than 6 months.
The owner has used the aircraft in another state or states, U.S. territory,
or District of Columbia 6 months or longer prior to bringing the aircraft to
Florida.
-----
"Brought into Florida" is awfully broad.
--
Jay Maynard, K5ZC http://www.conmicro.com
http://jmaynard.livejournal.com http://www.tronguy.net
Fairmont, MN (FRM) (Yes, that's me!)
AMD Zodiac CH601XLi N55ZC (ordered 17 March, delivery 2 June)

Jay Maynard wrote:

..
-----
"Brought into Florida" is awfully broad.

It's really not. Virtually every state that has a Sales tax has a Use
tax. It is so that if you live or have an ongoing connection with a
state you can't get around paying the sales tax buy purchasing an item
in another state.

Here are some example of when a Use tax would be due.

You order from a mail order company that has no establishment in your
home state. Technically you are supposed to pay Use tax.

You have a business and are exempt from Sales tax for items that are
purchased for resale. Let's say you purchase 12 widgets. You put 11 of
them up for sale and keep one for either personal or business use. You
owe Use tax on widget number 12.

Now I will admit that the way the Florida law and tax regulation is
written in regards to aircraft is **** poor. But the spirit behind the
law is not to charge for Use of their airspace. It is so FL residents
don't buy an aircraft in FL. Fly to some state that doesn't have a sales
tax or otherwise have a good way to get around sales taxes on aircraft
and then fly it back. What makes the issue more tricky than say a car is
that unlike a car you don't have to get a state specific license for an
aircraft which shows that the car is registered and taxed somewhere else.

There is no true example of say a pilot from Arkansas purchasing a plane
in FL or Arkansas and then that pilot taking a vacation to FL and
getting taxed.

On 2008-04-02, Gig 601Xl Builder wrote:
"Brought into Florida" is awfully broad.
It's really not. Virtually every state that has a Sales tax has a Use
tax. It is so that if you live or have an ongoing connection with a
state you can't get around paying the sales tax buy purchasing an item
in another state.

Oh, I understand full well the intent of the tax. Minnesota has one, and
I'll be paying it on the Zodiac. (6.5% of the full purchase price, ouch!)

Now I will admit that the way the Florida law and tax regulation is
written in regards to aircraft is **** poor.

It's the letter of the law that counts.

But the spirit behind the law is not to charge for Use of their airspace.

Actually, the Minnesota use tax *does* intend to charge for use of the
airports and airspace: it's due if an aircraft uses either for more than 60
days out of the first year. Fortunately, they do only charge it for
Minnesota owners. (The provision is for cases where a Minnesota owner bases
the aircraft in another state; I could do that, for example, living as close
to Iowa as I do.)

There is no true example of say a pilot from Arkansas purchasing a plane
in FL or Arkansas and then that pilot taking a vacation to FL and
getting taxed.

There's gotta be fire under the smoke; EAA wouldn't be publishing this one
right before Sun n Fun if there weren't some basis for it.
--
Jay Maynard, K5ZC http://www.conmicro.com
http://jmaynard.livejournal.com http://www.tronguy.net
Fairmont, MN (FRM) (Yes, that's me!)
AMD Zodiac CH601XLi N55ZC (ordered 17 March, delivery 2 June)

Jay Maynard wrote:
On 2008-04-02, Gig 601Xl Builder wrote:
"Brought into Florida" is awfully broad.
It's really not. Virtually every state that has a Sales tax has a Use
tax. It is so that if you live or have an ongoing connection with a
state you can't get around paying the sales tax buy purchasing an item
in another state.

Oh, I understand full well the intent of the tax. Minnesota has one, and
I'll be paying it on the Zodiac. (6.5% of the full purchase price, ouch!)

Now I will admit that the way the Florida law and tax regulation is
written in regards to aircraft is **** poor.

It's the letter of the law that counts.


But not only Florida's law counts. There are Federal Constitutional
issues here that negate a state from taxing a citizen from another state
in the only way this is going to effect you or I.



But the spirit behind the law is not to charge for Use of their airspace.

Actually, the Minnesota use tax *does* intend to charge for use of the
airports and airspace: it's due if an aircraft uses either for more than 60
days out of the first year. Fortunately, they do only charge it for
Minnesota owners. (The provision is for cases where a Minnesota owner bases
the aircraft in another state; I could do that, for example, living as close
to Iowa as I do.)

There is no true example of say a pilot from Arkansas purchasing a plane
in FL or Arkansas and then that pilot taking a vacation to FL and
getting taxed.

There's gotta be fire under the smoke; EAA wouldn't be publishing this one
right before Sun n Fun if there weren't some basis for it.

CYA all around. Never bad idea.

Jay Maynard wrote:
Actually, the Minnesota use tax *does* intend to charge for use of the
airports and airspace: it's due if an aircraft uses either for more
than 60 days out of the first year.

Speaking only of use of the airspace over a state (e.g. overflight but
no landing), there is a federal law I believe prohibits a state from
charging any taxes or fees for such a transit:

" (b) Prohibitions.--Except as provided in subsection (c) of this
section and section 40117 of this title, a State, a political
subdivision of a State, and any person that has purchased or leased an
airport under section 47134 of this title may not levy or collect a tax,
fee, head charge, or other charge on--
(1) an individual traveling in air commerce;
(2) the transportation of an individual traveling in air commerce;
(3) the sale of air transportation; or
(4) the gross receipts from that air commerce or transportation.

(c) Aircraft Taking Off or Landing in State.--A State or political
subdivision of a State may levy or collect a tax on or related to a
flight of a commercial aircraft or an activity or service on the
aircraft only if the aircraft takes off or lands in the State or
political subdivision as part of the flight."

Additional context may be found here (in case I have misinterpreted
the law):

http://frwebgate.access.gpo.gov/cgi-...:+49USC4011 6

"Jay Maynard" wrote

There's gotta be fire under the smoke; EAA wouldn't be publishing this one
right before Sun n Fun if there weren't some basis for it.

Did you not see what the Florida guberment put out, in response to AOPA's
inquiry?

They WILL NOT have a presence at Sun and Fun. None. Zip. Nada.

No trying to catch anyone with an untaxed plane. No Ramp Checks.
--
Jim in NC

On Wed, 02 Apr 2008 08:17:16 -0500, Gig 601Xl Builder wrote:

There is no true example of say a pilot from Arkansas purchasing a plane
in FL or Arkansas and then that pilot taking a vacation to FL and
getting taxed.

According to FDOR, they have and will continue to do just that.

FYI, you don't have to bring the aircraft to FL either.

http://dor.myflorida.com/dor/taxes/s...ft_dealer.html

Under most conditions, use tax is due on aircraft brought into Florida
within 6 months from the date of purchase. *However, use tax may be
immediately due if any of the following conditions are met:*

* The aircraft is owned by a Florida resident.
* The aircraft is owned by a corporation and used by a corporate
officer or director who is a Florida resident.
* The aircraft is owned by a corporate entity that has an individual
vested with authority to participate in the management, direction, or
control of the entity's affairs who is a resident of or makes his or her
permanent residence in this state.
* The aircraft is owned by a person, corporation, limited liability
company, partnership, joint adventure, association, syndicate, business
trust, trust, estate, or other form of artificial entity that is not
engaged in Florida in any employment, trade, business, or profession in
which the aircraft will be used.

WJRFlyBoy wrote:
On Wed, 02 Apr 2008 08:17:16 -0500, Gig 601Xl Builder wrote:

There is no true example of say a pilot from Arkansas purchasing a plane
in FL or Arkansas and then that pilot taking a vacation to FL and
getting taxed.

According to FDOR, they have and will continue to do just that.

FYI, you don't have to bring the aircraft to FL either.

http://dor.myflorida.com/dor/taxes/s...ft_dealer.html

Under most conditions, use tax is due on aircraft brought into Florida
within 6 months from the date of purchase. *However, use tax may be
immediately due if any of the following conditions are met:*

* The aircraft is owned by a Florida resident.
* The aircraft is owned by a corporation and used by a corporate
officer or director who is a Florida resident.
* The aircraft is owned by a corporate entity that has an individual
vested with authority to participate in the management, direction, or
control of the entity's affairs who is a resident of or makes his or her
permanent residence in this state.
* The aircraft is owned by a person, corporation, limited liability
company, partnership, joint adventure, association, syndicate, business
trust, trust, estate, or other form of artificial entity that is not
engaged in Florida in any employment, trade, business, or profession in
which the aircraft will be used.


I think here is the problem. The you are looking at is a page designed
for Florida aircraft brokers and dealers and is written in such a way as
to assume that that is who is reading it. Take for example this paragraph...

"Aircraft dealers and brokers must register with DOR to collect and
remit sales tax prior to beginning business in this state. Most aircraft
sellers must also register to collect and remit solid waste fees on
sales of new tires and sales of new lead-acid batteries. You can
register online; go to the Department's Internet site at
www.myflorida.com/dor and click on e-Services. If you do not have
Internet access, you can complete a paper Application to Collect and/or
Report Tax in Florida (Form DR-1)."


If you take that word for word it would make it look like an Arkansas
broker or dealer would be in violation of Florida law if he doesn't
register there even if the dealer had no business in FL.