Message-ID: <002b01c0cd74$1c71e2e0$241099d0@uyl2z>
From: "Doug Pohl" <dpohl@cdh.net>
To: "Lancair List" <Lancair.list@olsusa.com>
Subject: Tax Issues
Date: Wed, 25 Apr 2001 06:40:13 -0400
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When the Lancair List was first born, I wrote an article about the tax issue
that has four years later now raised considerable discussion.  Let me
emphasize two points that have not been mentioned in the discussion:

1. Registering the aircraft in one state when you live in another will work
IF you don't leave the airplane in the state that you reside in.  How many
of you can do that?  If you register a plane in a "non-tax" state and
nevertheless place it on the tarmac of your "taxed" state, you are subject
to periodic visits by the revenuers, and they do visit.  Registration to
avoid taxes is a FELONY in some states and as my father used to say, I'm not
going to jail for no one.

2. If you wait until your plane is done to pay your tax, you will pay tax on
the value of the finished plane, not its component parts.  In tax aggressive
states like California, they will search very hard to find out what a
finished Lancair is worth.  For this reason, I recommended a pay as you go
approach, paying tax on the parts you purchased so that you wind up with a
much lower tax liaibility than on a finished 300K-400K aircraft.  In
addition (you didn't hear this from me), some parts may be "lost" to
taxation along the way, i.e. engine, since many of the taxing authorities do
not know the difference between a Lancair IV airframe and an airframe with
engine.

Whatever you choose to do, be careful.

Doug Pohl
N488SD

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