|
Gary,
I had to deal with the California use
tax when I bought my ES kit. Bottom line, yes, you owe use tax
equivalent to your local sales tax for anything you bought out of state.
In my case, I paid over $4K in tax for my kit cost. When I asked about the
other components that would later go into the plane, the person I spoke to at
the board of equalization wasn't interested and said as far as he was concerned,
I was in compliance. I think he only wanted to see the Bill of Sale from
Lancair to determine the tax due.
You have one year from the date of
purchase to report your purchase and pay the tax before penalties and
interest begin to accrue. In my case, I exceeded that but was able to get
excused from the penalty part by writing a letter stating that I'd been
misinformed by someone else at the BOE (which I actually was) that the tax
wasn't due until the airplane was flying. That's true for the
property tax, but not the use tax, which is where the confusion
arose.
There's an eight year statute of
limitations for the state to come after you for not paying the tax. I
didn't want to risk getting nailed by playing some of the shell games
I'd heard some other guys were doing, so I just paid it and deducted it
from my income that year. Since finishing my plane over two years
ago, I've deducted the ripoff property taxes I have to pay on the plane
every July. As you well know, if you like taxes, California's the place to
live.
To contact the California Board of
Equalization, you can call them at 800-400-7115 or check their web site at
www.boe.ca.gov. Once there, you can do
a search for Publication 79A, which pertains to aircraft
purchases. It doesn't specifically address kitplanes, so you'll probably
need to talk to someone there to get that figured out to their
satisfaction.
You may contact me off-list if you
have any particular questions, but keep in mind I'm just a dumb airline pilot so
I can't dish out too much tax advice.
Skip Slater
N540ES
|