Tax bill of $26,000 for flying into US state of Maine?

[Peter R.]

Anyone else read the latest story in today's AvWebFlash's email newsletter
about the Massachusetts based pilot who flew his Cirrus several times into
Maine and unexpectedly received a Maine "use tax" bill of over $26,000?

Must GA Pilots Stay Out Of Maine? (story about half-way down):
http://www.avweb.com/eletter/archives/avflash/1010-full.html#196716

That's just insane. I am an Angel Flight pilot for Angel Flight Northeast and
this story makes me think twice about accepting any missions into or out of
the state of Maine.

--
Peter

[BillC85]

The Maine Pols either didn't think it through (imagine that) before they
enacted the tax or they actively want to discourage travel into Maine.

What other folks (trucking, shipping, car rental, etc.) would you suppose
this impacts?

In the meantime I guess I would refuse any Angel Flight requests into Maine
and make sure the requestor understands why.

BillC

"Peter R." > wrote in message
...
> Anyone else read the latest story in today's AvWebFlash's email newsletter
> about the Massachusetts based pilot who flew his Cirrus several times into
> Maine and unexpectedly received a Maine "use tax" bill of over $26,000?
>
> Must GA Pilots Stay Out Of Maine? (story about half-way down):
> http://www.avweb.com/eletter/archives/avflash/1010-full.html#196716
>
> That's just insane. I am an Angel Flight pilot for Angel Flight Northeast
> and
> this story makes me think twice about accepting any missions into or out
> of
> the state of Maine.
>
> --
> Peter

[Gig 601XL Builder]

Peter R. wrote:
> Anyone else read the latest story in today's AvWebFlash's email
> newsletter about the Massachusetts based pilot who flew his Cirrus
> several times into Maine and unexpectedly received a Maine "use tax"
> bill of over $26,000?
>
> Must GA Pilots Stay Out Of Maine? (story about half-way down):
> http://www.avweb.com/eletter/archives/avflash/1010-full.html#196716
>
> That's just insane. I am an Angel Flight pilot for Angel Flight
> Northeast and this story makes me think twice about accepting any
> missions into or out of the state of Maine.

I read the story and it doesn't give a lot of information on what basis the
state is trying to charge the tax. A Use Tax in it's normal use is one that
is for items bought by a citizen of the state out of the state and brought
into the state. This sounds like they are trying to charge someone just
"passing through" or visiting. If that's the case it is insane. The same tax
could be charged to drivers who drive their car into the state.

I have a feeling that this guy parked his plane somewhere that just happened
to get checked that day for residents that hadn't paid taxes and his N# got
written down and a bill was sent automatically. I don't even think a tax for
flying into a state from another state would be consititutional under the
interstate commerce clause of the US Constitution.

My bet is AOPA will have this cleared up before the week is out.

[Yes - I have a name[_2_]]

"Gig 601XL Builder" <wrDOTgiaconaATsuddenlink.net> wrote in message
...
>
> My bet is AOPA will have this cleared up before the week is out.
>

Maybe not...... It looks like this has been going on for a little while
already.


Maine Revenue Service Jumps On 'Use Tax' Bandwagon Against Aircraft Owners
Tue, 26 Jun '07

Better Keep That Bangor Trip Down To Less Than 20 Days... Or Stay Away
Altogether
Is Maine following Florida down the path to becoming an unfriendly haven for
pilots? Months after ANN broke the news about the Sunshine State's plans to
slap a "use tax" on owners of new aircraft unfortunate enough to then be
seen on airport ramps in the state, it appears tax collectors in the Pine
Tree state are following suit.

The Augusta Morning Sentinel reports a 2005 revision to Maine's tax policy
became effective January 1, that levies taxes on new aircraft owners if
their planes spend more than 20 days a year on the ground there. Like
Florida's controversial tax plan, it is intended to discourage residents of
the state from purchasing planes in states with lesser sales tax, then
flying them back home to Maine.

The tax -- up to five percent of the aircraft's purchase price -- also
applies to out-of-state owners who purchased aircraft within the past 12
months, and then flew those planes to Maine, even if they don't plan to stay
there.

Under the plan, a recent buyer planning to fly their new Cirrus or Cessna to
Maine for an extended vacation, over 20 days in length, would have to make
up the difference between Maine's five-percent tax, and whatever tax they
paid in the state where they actually bought the plane.

The idea is to use the added revenue, which works out to roughly $2 million,
to offset a slight tax cut for Maine residents. Larger aircraft -- those
weighing over 6,000 pounds -- are exempt from the tax.

Officials with the Maine Revenue Service are also requesting flight plan
information from the FAA, so they may track which pilots have recently
purchased affected aircraft... and how much time they're spending in Maine.

The policy is a "short-sighted money grab," says Bill Perry, who operates
Maine Instrument Flight and Maine Beechcraft at the Augusta State Airport
(AUG).

"If you own a plane and a summer home here, or have relatives here and you
want to come and visit for month, you're not going do that," Perry said.
"The state must want these people not to come here. And they won't, because
they're afraid they're going to get nailed on a use tax on their airplane."

Proponents of the plan say the 20-day provision gives pilots enough time to
avoid the tax, which is similar to a fee in place for out-of-state residents
who trailer their own boats to Maine for recreational use.

"I think (lawmakers in 2005) looked hard to find a balance and looked at the
number of days an individual can bring a plane here," said acting state tax
assessor Jerome Gerard. "I think it's pretty reasonable when you consider
that 20 days doesn't include repair time... It's not that unfriendly."

The Aircraft Owners and Pilots Association says levying such fees on
aircraft flying into Maine will likely convince pilots to drive there
instead... or, to avoid the state entirely.

"(The policy) also flies in the face of your emphasis on building a 'fair
and stable business environment,'" wrote AOPA president Phil Boyer, in a
letter to Gov. John Baldacci. "Please know that in the meantime, we will be
advising AOPA's 410,000 members outside of Maine to forgo what might be a
fairly costly trip to your state."

Baldacci spokeswoman Joy Leach told the paper the governor's office is
reviewing AOPA's letter. Similar legislation, that would have handed Maine
pilots a tax bill for repairs to their aircraft, recently died in the final
moments of the 2007 legislative session, according to AOPA


>

[Tri-Pacer]

> Anyone else read the latest story in today's AvWebFlash's email newsletter
> about the Massachusetts based pilot who flew his Cirrus several times into
> Maine and unexpectedly received a Maine "use tax" bill of over $26,000?
>
>
The article mentioned that the chap had a Summer home in Maine. Perhaps they
consider him a resident since he owns property and spends time there.

Bummer no matter what the reason.

Paul
N1431A
KPLU

[Jim Logajan]

"Gig 601XL Builder" <wrDOTgiaconaATsuddenlink.net> wrote:
> I read the story and it doesn't give a lot of information on what
> basis the state is trying to charge the tax. A Use Tax in it's normal
> use is one that is for items bought by a citizen of the state out of
> the state and brought into the state. This sounds like they are trying
> to charge someone just "passing through" or visiting. If that's the
> case it is insane. The same tax could be charged to drivers who drive
> their car into the state.

Charging a tax for items that are "passing through" would be a clear
violation of the "commerce clause" (Article 1, section 8) of the U.S.
constitution, which was intended to remove the power of states to place
tariffs and taxes on commerce that passed through them.

One example of a state that had a law that was later ruled unconstitutional
based on the commerce clause is California. For years California would
charge a special fee on cars bought in other states and moved into the
state. Cars bought from dealers in California were not charged the fee.

I remember telling my wife that I thought the fee/tax was unconstitutional
when we moved to California back in the early 90's and got hit with the fee
when we registered our cars there. Fortunately someone else with the time,
money, and determination must have thought the same because several years
later I learned that someone had taken the state to court and got the law
struck down - and refunds for a lot of people like ourselves who were hit
with the fee.

[Robert M. Gary]

On Dec 6, 8:22 am, "Gig 601XL Builder" <wrDOTgiaconaATsuddenlink.net>
wrote:
> Peter R. wrote:
> > Anyone else read the latest story in today's AvWebFlash's email
> > newsletter about the Massachusetts based pilot who flew his Cirrus
> > several times into Maine and unexpectedly received a Maine "use tax"
> > bill of over $26,000?
>
> > Must GA Pilots Stay Out Of Maine? (story about half-way down):
> >http://www.avweb.com/eletter/archives/avflash/1010-full.html#196716
>
> > That's just insane. I am an Angel Flight pilot for Angel Flight
> > Northeast and this story makes me think twice about accepting any
> > missions into or out of the state of Maine.
>
> I read the story and it doesn't give a lot of information on what basis the
> state is trying to charge the tax. A Use Tax in it's normal use is one that
> is for items bought by a citizen of the state out of the state and brought
> into the state. This sounds like they are trying to charge someone just
> "passing through" or visiting. If that's the case it is insane. The same tax
> could be charged to drivers who drive their car into the state.

The guy is screwed. For the purpose of tax collection I believe Maine
defines a citizen as someone who spends more than 20 days/year in
Maine. It sounds like this guy qualifies. Personally, I believe that
all use tax is unconstituational and I'd love for the courts to
actually get to handle a case that is this crazy.

-Robert

[Gig 601XL Builder]

Robert M. Gary wrote:

>
> The guy is screwed. For the purpose of tax collection I believe Maine
> defines a citizen as someone who spends more than 20 days/year in
> Maine. It sounds like this guy qualifies. Personally, I believe that
> all use tax is unconstituational and I'd love for the courts to
> actually get to handle a case that is this crazy.
>
> -Robert

Use tax in and of itself is perfectly understandable. Let's say I order all
of my copy paper from XYZ company out of state and XYZ doesn't have a
presence in the state I end up not paying sales tax that I would have paid
if I went to Office Depot down the street and bought it. Hence the Use tax.

But for a state to claim citizenship for anyone that spends more than 20
days in the state is stupid and shouldn't stand up in court. I live 20 miles
from the Louisiana border. I spend way more than 20 days in Louisiana every
year.

[Mike Isaksen]

"Tri-Pacer" ...
>> Anyone else read the latest story in today's AvWebFlash's email
>> newsletter
>> about the Massachusetts based pilot who flew his Cirrus several times
>> into
>> Maine and unexpectedly received a Maine "use tax" bill of over $26,000?
>>
>>
> The article mentioned that the chap had a Summer home in Maine. Perhaps
> they consider him a resident since he owns property and spends time there.
>
> Bummer no matter what the reason.

I own vacation property in two other states, but they won't let me vote
(state, local or school tax). I wonder if Maine lets him vote. Also, the 20
day number sounds very short. Anyone know the typical time period for other
States?

The Use Tax issue is very common in any state that has high Sales Taxes, and
the state governments can get pretty aggressive (NY being one). NY does
periodic walkdowns at most airports and reviews tenant & transient records.
The only upside is NY fully credits sales/use tax paid in other states on
the item in question. Someone mentioned there is also a "used and useful"
provision that won't let the Tax apply to used items brought into the
State?!?

[Peter Clark]

On Thu, 6 Dec 2007 10:22:29 -0600, "Gig 601XL Builder"
<wrDOTgiaconaATsuddenlink.net> wrote:

>Peter R. wrote:
>> Anyone else read the latest story in today's AvWebFlash's email
>> newsletter about the Massachusetts based pilot who flew his Cirrus
>> several times into Maine and unexpectedly received a Maine "use tax"
>> bill of over $26,000?
>>
>> Must GA Pilots Stay Out Of Maine? (story about half-way down):
>> http://www.avweb.com/eletter/archives/avflash/1010-full.html#196716
>>
>> That's just insane. I am an Angel Flight pilot for Angel Flight
>> Northeast and this story makes me think twice about accepting any
>> missions into or out of the state of Maine.
>
>I read the story and it doesn't give a lot of information on what basis the
>state is trying to charge the tax. A Use Tax in it's normal use is one that
>is for items bought by a citizen of the state out of the state and brought
>into the state. This sounds like they are trying to charge someone just
>"passing through" or visiting. If that's the case it is insane. The same tax
>could be charged to drivers who drive their car into the state.
>
>I have a feeling that this guy parked his plane somewhere that just happened
>to get checked that day for residents that hadn't paid taxes and his N# got
>written down and a bill was sent automatically. I don't even think a tax for
>flying into a state from another state would be consititutional under the
>interstate commerce clause of the US Constitution.
>
>My bet is AOPA will have this cleared up before the week is out.

This story has been going on for a while, somewhere I read that they
had someone sending out bills based on IFR flight plans they pulled
from a tracking service.

[Gig 601XL Builder]

Peter Clark wrote:
> This story has been going on for a while, somewhere I read that they
> had someone sending out bills based on IFR flight plans they pulled
> from a tracking service.

If that's the case then how do they even know how long a plane is there? If
you fly in on the 1st of the month IFR, out on the 2nd VFR and then fly back
19th VFR and then out on the 21st IFR, the tracking services will make it
look like you have been there 20 days.

[Peter Clark]

On Fri, 7 Dec 2007 08:21:13 -0600, "Gig 601XL Builder"
<wrDOTgiaconaATsuddenlink.net> wrote:

>Peter Clark wrote:
>> This story has been going on for a while, somewhere I read that they
>> had someone sending out bills based on IFR flight plans they pulled
>> from a tracking service.
>
>If that's the case then how do they even know how long a plane is there? If
>you fly in on the 1st of the month IFR, out on the 2nd VFR and then fly back
>19th VFR and then out on the 21st IFR, the tracking services will make it
>look like you have been there 20 days.

I didn't say what they were doing made any sort of logical sense...

I base my aircraft in MA. I do all my maintenance at PWM. Does my
flying there more than 20 times a year on daytrips to pay them money
to fix my aircraft (and pay sales tax on those parts and repairs) also
expose me to the use tax? The whole thing is just stupid for anyone
who's not a bona-fide resident of the state. Just like those people
who live in MA and register their cars in NH to avoid MA taxes. Get
caught, pay up. It's not hard for an investigator to figure out
whether you're really living there or not. And I always thought
residency was based on 181 days/year, but what do I know.

[Robert M. Gary]

On Dec 6, 11:44 am, "Gig 601XL Builder" <wrDOTgiaconaATsuddenlink.net>
wrote:
\
> Use tax in and of itself is perfectly understandable. Let's say I order all
> of my copy paper from XYZ company out of state and XYZ doesn't have a
> presence in the state I end up not paying sales tax that I would have paid
> if I went to Office Depot down the street and bought it. Hence the Use tax.

I don't personally believe that the constitution's rule on interstate
commerce allows for use tax. However, the courts have ruled that use
tax is permitted under certain situations. One is that the use tax is
the same as the in-state tax (sales tax), the other is timeliness,
which is originally why California exempted aircraft from use tax if
they are kept out of state for 3 months.

-robert

[Mike Isaksen]

"Mike Isaksen" > wrote in message ...
>
> "Tri-Pacer" ...
>>> Anyone else read the latest story in today's AvWebFlash's email
>>> newsletter
>>> about the Massachusetts based pilot who flew his Cirrus several times
>>> into
>>> Maine and unexpectedly received a Maine "use tax" bill of over $26,000?
>>>
>>>
>> The article mentioned that the chap had a Summer home in Maine. Perhaps
>> they consider him a resident since he owns property and spends time
>> there.
>>
>> Bummer no matter what the reason.
>
> I own vacation property in two other states, but they won't let me vote
> (state, local or school tax). I wonder if Maine lets him vote. Also, the
> 20 day number sounds very short. Anyone know the typical time period for
> other States?
>
> The Use Tax issue is very common in any state that has high Sales Taxes,
> and the state governments can get pretty aggressive (NY being one). NY
> does periodic walkdowns at most airports and reviews tenant & transient
> records. The only upside is NY fully credits sales/use tax paid in other
> states on the item in question. Someone mentioned there is also a "used
> and useful" provision that won't let the Tax apply to used items brought
> into the State?!?
>

I always say the devil is in the details, and no less with this issue. The
first year clause is typical of determining if it's new, but the 20 days
still seems a bit presumptuous and usury.

Here's a follow-up to the above, as posted on the Van's AirForce site by
Doug R:

36 M.R.S.A. §1760, sub-§45:

An aircraft purchased and used outside of Maine but subsequently used in
Maine will be exempt from use tax provided the aircraft is not present in
Maine for more than 20 days during the 12 months following its purchase. Any
time during which the aircraft is present in Maine for major alterations,
major repairs or preventive maintenance is not counted against those 20
days.

[Andrew Sarangan]

On Dec 6, 1:34 pm, "Robert M. Gary" > wrote:
> On Dec 6, 8:22 am, "Gig 601XL Builder" <wrDOTgiaconaATsuddenlink.net>
> wrote:
>
>
>
>
>
> > Peter R. wrote:
> > > Anyone else read the latest story in today's AvWebFlash's email
> > > newsletter about the Massachusetts based pilot who flew his Cirrus
> > > several times into Maine and unexpectedly received a Maine "use tax"
> > > bill of over $26,000?
>
> > > Must GA Pilots Stay Out Of Maine? (story about half-way down):
> > >http://www.avweb.com/eletter/archives/avflash/1010-full.html#196716
>
> > > That's just insane. I am an Angel Flight pilot for Angel Flight
> > > Northeast and this story makes me think twice about accepting any
> > > missions into or out of the state of Maine.
>
> > I read the story and it doesn't give a lot of information on what basis the
> > state is trying to charge the tax. A Use Tax in it's normal use is one that
> > is for items bought by a citizen of the state out of the state and brought
> > into the state. This sounds like they are trying to charge someone just
> > "passing through" or visiting. If that's the case it is insane. The same tax
> > could be charged to drivers who drive their car into the state.
>
> The guy is screwed. For the purpose of tax collection I believe Maine
> defines a citizen as someone who spends more than 20 days/year in
> Maine. It sounds like this guy qualifies. Personally, I believe that
> all use tax is unconstituational and I'd love for the courts to
> actually get to handle a case that is this crazy.
>
> -Robert- Hide quoted text -
>

How is this possible? Both Massachusetts and Maine have 5% use tax. If
he is a resident of MA, then he has already paid his sales tax to MA.
Regardless of where his residency is, how could ME ask for that same
tax? If he is from a state where there are no sales tax, then I could
see a point to this argument.

[nobody[_2_]]

"Andrew Sarangan" > wrote in message
...

> How is this possible? Both Massachusetts and Maine have 5% use tax. If
> he is a resident of MA, then he has already paid his sales tax to MA.
> Regardless of where his residency is, how could ME ask for that same
> tax? If he is from a state where there are no sales tax, then I could
> see a point to this argument.
>

Massachusetts stopped charging sales tax on aircraft a few years ago. Maine
only charges it if the plane is purchased less than 1 year ago. I paid Mass
Sales Tax on mine, and have had it over a year, so they won't charge me.

[Peter Clark]

On Sun, 9 Dec 2007 23:36:34 -0800 (PST), Andrew Sarangan
> wrote:

>How is this possible? Both Massachusetts and Maine have 5% use tax. If
>he is a resident of MA, then he has already paid his sales tax to MA.
>Regardless of where his residency is, how could ME ask for that same
>tax? If he is from a state where there are no sales tax, then I could
>see a point to this argument.

MA does not have a sales tax on aircraft, they have an annual
registration fee instead.

Regardless, I live in MA, if I want to spend 21+ days in various
locations in ME (hotel, B&B, camping, whatever) in the course of a
calendar year as a tourist they expect me to pay use tax on the
aircraft I use to go there? I'm reallly having a hard time seeing the
legal basis. The aircraft isn't based in Maine, I don't live there,
don't own property there, and I don't spend (181?) days a year there
to be considered a resident by what I understand is a normal standard,
so what is the legal basis for this (other than what appears to be a
defective state law)? Hell, I bet someone with money and time could
get it struck down under equal protection, let us know when you start
sending tax bills to out of state car owners and trucking companies
that log more than 20 days/year through the toll booths (on top of the
registration fee they already likely charge out of state trucks).

[nobody[_2_]]

"Peter Clark" > wrote in message
...
>
> MA does not have a sales tax on aircraft, they have an annual
> registration fee instead.

The registration fee is not 'instead' of the sales tax. It used to be both.
The Registration fee is instead of excise tax (what you pay your city/town
every year for your car)

> Regardless, I live in MA, if I want to spend 21+ days in various
> locations in ME (hotel, B&B, camping, whatever) in the course of a
> calendar year as a tourist they expect me to pay use tax on the
> aircraft I use to go there?

I don't think so. They seem to be trying to get the people 'going around the
system'. Various things like having a Delaware Corp own the plane, live in a
border town and keep your plane on the other side of the border, etc.

Sounds like the subject of the avweb story got caught in the middle.

[Robert M. Gary]

On Dec 10, 4:59 am, Peter Clark
> wrote:
> Hell, I bet someone with money and time could
> get it struck down under equal protection, let us know when you start
> sending tax bills to out of state car owners and trucking companies
> that log more than 20 days/year through the toll booths (on top of the
> registration fee they already likely charge out of state trucks).

I think that is the plan. This guy has an attorney and I think AOPA
may be helping him too. However, in the interview I read he said its
only economical to take this so far. We'll see who gives up first.
In my opinion, knowing that Maine is a very liberal state, I think
that they are just ****ed off at anyone "rich" enough to afford an
airplane and believe they should give their money to the people (aka
the gov't), but that's just my political slant on this.

-Robert

[Andrew Sarangan]

On Dec 10, 7:59 am, Peter Clark
> wrote:
> On Sun, 9 Dec 2007 23:36:34 -0800 (PST), Andrew Sarangan
>
> > wrote:
> >How is this possible? Both Massachusetts and Maine have 5% use tax. If
> >he is a resident of MA, then he has already paid his sales tax to MA.
> >Regardless of where his residency is, how could ME ask for that same
> >tax? If he is from a state where there are no sales tax, then I could
> >see a point to this argument.
>
> MA does not have a sales tax on aircraft, they have an annual
> registration fee instead.
>
> Regardless, I live in MA, if I want to spend 21+ days in various
> locations in ME (hotel, B&B, camping, whatever) in the course of a
> calendar year as a tourist they expect me to pay use tax on the
> aircraft I use to go there? I'm reallly having a hard time seeing the
> legal basis. The aircraft isn't based in Maine, I don't live there,
> don't own property there, and I don't spend (181?) days a year there
> to be considered a resident by what I understand is a normal standard,
> so what is the legal basis for this (other than what appears to be a
> defective state law)? Hell, I bet someone with money and time could
> get it struck down under equal protection, let us know when you start
> sending tax bills to out of state car owners and trucking companies
> that log more than 20 days/year through the toll booths (on top of the
> registration fee they already likely charge out of state trucks).

I suspect there is more to this story than what appears. The article
implies that the pilot owns vacation property in Maine. Even then, I
don't know how the state could know whether or not he spent 20 days
there. It is possible that he had claimed some type of tax excemption
for the property that he lived there for certain number of days per
year.