Google and don't get caught
ScottSchmidt said:
Does anyone know the tax in Arizona?
Also, is it possible to register a plane in Arizona even though I live in Utah but own property in Arizona?
Google personal property tax Arizona, Utah, airplanes or an combo or these and other key words. From above experimental a/c are exempt, which is cool, but could change tomorrow. I am not saying Gil is wrong, but what ever state you live in you should get the tax code and see it in writing.
For AZ:
http://www.revenue.state.az.us/brochure/606.pdf
http://www.revenue.state.az.us/brochure/545.pdf
http://www.revenue.state.az.us/Forms/Property/usecode.pdf
http://www.cityofprescott.net/_d/use_tax.pdf
For UT:
http://www.co.davis.ut.us/assessor/personal_property/aircraft.cfm
I know you are not asking can you cheat but some people do try to use the two state scam to avoid taxes, with differnt levels of success.
My suggestion is register and pay taxes in the same state you live and will base the plane. Some states have a one time tax and others charge tax yearly. Some states have exemptions and you may be able to get under one of those with creative accounting.
This is another way to put it; Can you cheat on your taxes? Yea sure you can, but of course its illegal and penalties for getting caught can be high.
State auditors and State Police cruise airport ramps, marinas and highways and take down registration #'s of planes, boats and pull over out of state cars that get noted (logged into the computer) repeatedly over a period of time. A simple check for the state is to check if you have a driver license number in that state and where the plane is registered. If the name matches and the addresses differ, you will get a letter and the chance to explain. Many states have a TAX sticker that allows a quick check to see if you're payed up.
A millionaire with several private jets planes, boats and cars tried this, setting up a fake business in a neighboring state with no PP Tax, but based and used the assets in another. He got caught. PP tax may not get you jail time but it will get you into some serious back taxes and fines.
The best you can hope to do is prove the lowest value to lower tax liability. The best way is to save all the receipts and show them what it cost, and be sure to show any sales tax you payed in that state, which is deduct. I know one guy who just showed the auditor the cost of the kit and they took that. That was a wind fall savings for him, but don't count on that. Since most of us buy from out of the state, sales tax free, we enjoy some nice savings during the build process, but someone sometime is going to have their hand out sooner or later. The Government (mostly states) want to do away with sales tax free internet sales. If they change that rule you will no doubt have to pay sales tax on the engine, prop, airframe kit and every nut an bolt you buy from Spruce or who ever. The good news, if you can call it that, is that would come off the PP tax bill (may be). If they double dip, sales tax and PP tax (which is not inconceivable since they do that with cars), than I would move to another state. I know Oregon is one of the states without PP Tax.
Back in the 80's homebuilt planes where less wide spread, so you could tell the state you built it for $10-grand. They took what you said, wrote it down and taxed on that, done deal. Unfortunately we are victim's of our own success. If you tell them your RV-X cost $10,000 now a days, they will laugh at you. State auditors are more savvy and know what RV's sell for. Every state is different and had to go thru this in two states. Some states like NY want you to pay as you go, PP tax on the tail kit, wing kit, fuselage kit, etc..... before you finish it; flying or not they want you to show (give) them the money.
Of course the state may have a hard time enforcing this.
So my suggestion is to anyone is just follow the rules and you won't have to worry about looking over your shoulder. Yes you can register in another state and be able to avoid taxes, but if the sole purpose is to avoid paying the state you live and operate out of, you could get caught. There are allowances for people who do live in two states and are only part time residence or each. That's important in a snow bird state like AZ. Love AZ by the way and stayed there a lot over the years, since my Dad lived there in the PHX area.
I know a guy in WA state that got in an argument on the airport ramp with a State Trouper, who was doing a "tax ramp check". The Trouper asked why he did not have a tax sticker on his RV-4. My friend almost got arrested arguing. Actually he got bum advice. Most states have an exemption for "manufactures". Since we're the manufacture (in the FAA eyes) we can claim we're allowed the exemption, but this has been disallowed in states like WA. For tax purpose manufacture is someone who is in business of building for profit and thus is paying other taxes. Since we can not build for profit or manufacturing for resale, it makes sense. Just know the rules of the game.
From what I see UT is not that bad. It looks like $400 on $100-grand. So what they think a RV-10 is worth is up for grabs. I know you could build a basic RV-10 for around $100 to $120-grand without much problem, but than people are asking $225,000, so your job will be to assure the state your plane is worth less. If you have paper to prove it than they will be more likely go along. I can't see how they can argue with the facts and charge you for your own labor.
George
IS THERE ANY CENTRAL PLACE TO LOOK UP PP TAX ON EXPERIMENTAL AIRCRAFT FOR ALL STATES? That would be nice resource for all.