registation of aircraft

[Ray Atkinson]

I bought my dream plane this summer an rv-6a and the state of washington is
very happy about it because every time an airplane changes hands they
collect 7 plus percent in taxes. I,m seriously considering moving the plane
to oregon where I,m planning to move when I retire in 2.5 years. I need some
of the groups wisdom about some alternative ways to deal with this. I,m
perfectly willing to pay my share but this seems really unfair. thanks
ray in ballard

[Larry Smith]

"Ray Atkinson" > wrote in message
...
> I bought my dream plane this summer an rv-6a and the state of washington
is
> very happy about it because every time an airplane changes hands they
> collect 7 plus percent in taxes. I,m seriously considering moving the
plane
> to oregon where I,m planning to move when I retire in 2.5 years. I need
some
> of the groups wisdom about some alternative ways to deal with this. I,m
> perfectly willing to pay my share but this seems really unfair. thanks
> ray in ballard

Weel, Ray, it's a matter of state law.

Oregon shouldn't charge you for registering it there, not for the purchase
tax anyway. But then that's a matter of Oregon law. As for Washington's
sales tax, it seems to me the seller would be paying that, not the
purchaser. Did YOU have to pay it? It all depends on the particular
state's laws.

In our state the owners of experimentals are always going round and round
with the taxing authorities, especially the counties on ad valorem taxes.
The counties will appraise the aircraft at 100k and the owner will say it's
worth 5k.

We have a nice statute favorable to old airplanes. The tax base for an
elderly aircraft built before 1954 is $500, meaning ad valorem tax is around
$20 a year. That's attractive for an owner of a DC-3 or P-51. Or even a
Stearman or Taylorcraft driver.

[Ron Wanttaja]

On Mon, 10 Nov 2003 10:05:47 -0500, "Larry Smith" >
wrote:

>
>"Ray Atkinson" > wrote in message
...
>> I bought my dream plane this summer an rv-6a and the state of washington is
>> very happy about it because every time an airplane changes hands they
>> collect 7 plus percent in taxes. I,m seriously considering moving theplane
>> to oregon where I,m planning to move when I retire in 2.5 years. I need some
>> of the groups wisdom about some alternative ways to deal with this. I,m
>> perfectly willing to pay my share but this seems really unfair. thanks
>> ray in ballard
>
>Weel, Ray, it's a matter of state law.
>
>Oregon shouldn't charge you for registering it there, not for the purchase
>tax anyway. But then that's a matter of Oregon law. As for Washington's
>sales tax, it seems to me the seller would be paying that, not the
>purchaser. Did YOU have to pay it? It all depends on the particular
>state's laws.

The tax Ray is referring to is not actually a sales tax; Washington calls
it a "Use Tax." It must be paid by the purchaser at the time the plane
receives its Washington state registration. While it is a Use Tax and not
a Sales Tax, by some magic the tax rate is the same as the state sales tax
rate (though without...so far...the local community "kickers"). Since
Washington doesn't have an income tax, the sales and use taxes are pretty
aggressive.

>In our state the owners of experimentals are always going round and round
>with the taxing authorities, especially the counties on ad valorem taxes.
>The counties will appraise the aircraft at 100k and the owner will say it's
>worth 5k.

The Use Tax is based on the amount listed on the FAA Bill of Sale. Most
sellers 'round here leave the amount off the Bill when they sell, and let
the buyer fill in the amount. Some buyers...horrors!... write in an amount
lower than the amount of money that changed hands.

As one might expect, the people who figure the taxes owed do not have a
natal date of today-1. They have the blue books for aircraft values.
There is more leeway for homebuilts, though, since many types aren't
listed. But I had a friend spend an uncomfortable fifteen minutes at the
local tax office when he was trying to register his new T-18 and the
assessor was suspicious of the low amount of money that he claimed he
bought the airplane for. She went though the blue book, asking, "Is it
about the same as a Cessna 150? Is it about the same as a Cessna 172? Is
it about...."

Builders of homebuilt don't escape the trap...they have to list an
estimated value at the time they first register the airplane. They are
allowed to deduct any state sales taxes paid on parts from the Use Tax they
owe.

One key factor is the new owner must present a Use Tax receipt to get the
plane registered in Washington state. If you are moving to Oregon, you
might just file the change of address paperwork with the FAA to show the
new address. The Washington State Patrol does survey airplanes at airports
and run their N-numbers through a database to find those who haven't paid,
but if you've got the plane in a closed hangar and/or are moving to Oregon
soon, that's probably not a big problem.

The fines, however, are fairly high.

>We have a nice statute favorable to old airplanes. The tax base for an
>elderly aircraft built before 1954 is $500, meaning ad valorem tax is around
>$20 a year. That's attractive for an owner of a DC-3 or P-51. Or even a
>Stearman or Taylorcraft driver.

Yearly registration fees in Washington state are based on the value of the
plane, but they at least have a flat rate for homebuilts. $28/year, IIRC,
as opposed to $50 or so for a Cessna 150-class plane.

Ron Wanttaja

[Rich S.]

"Ron Wanttaja" > wrote in message
...
>
> One key factor is the new owner must present a Use Tax receipt to get the
> plane registered in Washington state. If you are moving to Oregon, you
> might just file the change of address paperwork with the FAA to show the
> new address. The Washington State Patrol does survey airplanes at
airports
> and run their N-numbers through a database to find those who haven't paid,
> but if you've got the plane in a closed hangar and/or are moving to Oregon
> soon, that's probably not a big problem.

The new aircraft registration law uses airport administration officials to
rat on owners. Private strips are exempt.

"A municipality or port district that owns, operates, or leases an airport,
as defined in RCW 47.68.020, with the intent to operate, shall require from
an aircraft owner proof of aircraft registration as a condition of leasing
or selling tiedown or hanger space for an aircraft. It is the
responsibility of the lessee or purchaser to register the aircraft. The
airport shall work with the aviation division to assist in its efforts to
register aircraft by providing information about based aircraft on an annual
basis as requested by the division."

Rich S.

[C J Campbell]

Here in Washington State you are pretty much stuck with paying the use tax,
which the state requires the buyer to pay.

There are some loopholes, but they may not work for your RV-6. An airplane
purchased for resale buy a licensed aircraft dealer is not subject to use
tax. An airplane purchased for use as a leased aircraft or rental is also
not subject to use tax, but it must collect sales taxes on all the lease and
rental income unless that rental income is in conjunction with a service,
such as flight instruction. Hence, student pilots renting a plane for dual
instruction do not pay sales tax, but student pilots flying solo have to
pay.

Airplanes purchased for the purpose of interstate commercial transportation
are also exempt (the "Boeing" clause), as are airplanes purchased for use
outside of the state.

The use tax is supposed to be on the "fair market value" of your aircraft,
not necessarily what you paid. Any trade that you made for the aircraft is a
deduction against fair market value -- you pay use tax only on the
difference between the trade and the new airplane. The listed purchase price
on the FAA sale agreement is supposed to be evidence of the fair market
value, however. Obviously, if you buy the aircraft for "$1 and other
consideration," then the state is probably going to claim that your fair
market value is higher. But if you dishonestly put down some amount at the
low end of the value of your airplane, you will probably get away with it --
at least in this life (do tax cheats go to Hell?).

[Paul Lee]

Ron Wanttaja > wrote in message >...
>.....
> Builders of homebuilt don't escape the trap...they have to list an
> estimated value at the time they first register the airplane. They are
> allowed to deduct any state sales taxes paid on parts from the Use Tax they
> owe.
> ......

Interesting that SD is similar to WA (no income taxes - just sales/use) but
they tax home planes on the gross receipt - including on parts for which sales
taxes were paid. Wonder if that is legal?

[RDA]

When I moved from ICT, KS (where, surprise-surprise-surprise, old airplanes
are treated with Some Reverence) to NC, my Tri-Pacer sat at tie-down for
about 4-5 months when I received my 'proposed property tax valuation' in the
mail. Privately owned airport, public use, however. The secretary for the
somewhat absentee owner went around and wrote down N-numbers, got the
ownership info, and gave it all to the county (transients included!). She
was to estimate the value of each airplane and send it in to be
cross-referenced to their data.

My tax bill was for $100,000.00 value on my Tri-Pacer.

I promptly called up the tramp and offered it to her for only $50,000. Even
with a 160 Lyc. and the aux tank. A steal.

I guess she didn't have enough credit to swing the deal with the bank. Oh
well....



"Ron Wanttaja" > wrote in message
...
> On Mon, 10 Nov 2003 10:05:47 -0500, "Larry Smith" >
> wrote:
>
> >
> >"Ray Atkinson" > wrote in message
> ...
> >> I bought my dream plane this summer an rv-6a and the state of
washington is
> >> very happy about it because every time an airplane changes hands they
> >> collect 7 plus percent in taxes. I,m seriously considering moving
theplane
> >> to oregon where I,m planning to move when I retire in 2.5 years. I need
some
> >> of the groups wisdom about some alternative ways to deal with this. I,m
> >> perfectly willing to pay my share but this seems really unfair. thanks
> >> ray in ballard
> >
> >Weel, Ray, it's a matter of state law.
> >
> >Oregon shouldn't charge you for registering it there, not for the
purchase
> >tax anyway. But then that's a matter of Oregon law. As for
Washington's
> >sales tax, it seems to me the seller would be paying that, not the
> >purchaser. Did YOU have to pay it? It all depends on the particular
> >state's laws.
>
> The tax Ray is referring to is not actually a sales tax; Washington calls
> it a "Use Tax." It must be paid by the purchaser at the time the plane
> receives its Washington state registration. While it is a Use Tax and not
> a Sales Tax, by some magic the tax rate is the same as the state sales tax
> rate (though without...so far...the local community "kickers"). Since
> Washington doesn't have an income tax, the sales and use taxes are pretty
> aggressive.
>
> >In our state the owners of experimentals are always going round and round
> >with the taxing authorities, especially the counties on ad valorem taxes.
> >The counties will appraise the aircraft at 100k and the owner will say
it's
> >worth 5k.
>
> The Use Tax is based on the amount listed on the FAA Bill of Sale. Most
> sellers 'round here leave the amount off the Bill when they sell, and let
> the buyer fill in the amount. Some buyers...horrors!... write in an
amount
> lower than the amount of money that changed hands.
>
> As one might expect, the people who figure the taxes owed do not have a
> natal date of today-1. They have the blue books for aircraft values.
> There is more leeway for homebuilts, though, since many types aren't
> listed. But I had a friend spend an uncomfortable fifteen minutes at the
> local tax office when he was trying to register his new T-18 and the
> assessor was suspicious of the low amount of money that he claimed he
> bought the airplane for. She went though the blue book, asking, "Is it
> about the same as a Cessna 150? Is it about the same as a Cessna 172? Is
> it about...."
>
> Builders of homebuilt don't escape the trap...they have to list an
> estimated value at the time they first register the airplane. They are
> allowed to deduct any state sales taxes paid on parts from the Use Tax
they
> owe.
>
> One key factor is the new owner must present a Use Tax receipt to get the
> plane registered in Washington state. If you are moving to Oregon, you
> might just file the change of address paperwork with the FAA to show the
> new address. The Washington State Patrol does survey airplanes at
airports
> and run their N-numbers through a database to find those who haven't paid,
> but if you've got the plane in a closed hangar and/or are moving to Oregon
> soon, that's probably not a big problem.
>
> The fines, however, are fairly high.
>
> >We have a nice statute favorable to old airplanes. The tax base for an
> >elderly aircraft built before 1954 is $500, meaning ad valorem tax is
around
> >$20 a year. That's attractive for an owner of a DC-3 or P-51. Or even
a
> >Stearman or Taylorcraft driver.
>
> Yearly registration fees in Washington state are based on the value of the
> plane, but they at least have a flat rate for homebuilts. $28/year, IIRC,
> as opposed to $50 or so for a Cessna 150-class plane.
>
> Ron Wanttaja
>