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Thread: Use Tax

  1. #1

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    Use Tax

    So can anyone give the the details on Use tax on homebuilts registered in connectiut. I have scratchbuilt a sonex and am getting close to needing to register it. I tried reading through the state statutes but it is very confusing. There is an excemption for sale of aircraft and purchase of aircraft parts for aircraft manufacturers in ct. Does building an experimental qualify me as a "manufacturer"? If not, how do I determine how much I have to pay the state? The rate is 6.35% but what is that a percent of? My plane is made up of some parts purchased from the manufacturer, some bought in the state, some bought used from other builders, etc. I have some recipts but not every purchase included a recipt such as a number of "used" parts I bought from another builder. I don't have a nice neat bill of sale for a kit from the manufacturer to send them. I realisticly have about 16k into the plane but most sonex are selling for between 25 and 40k. Someone here has to have been through registering a new experimental aircraft in connecticut before. I just need some direction.Keith

  2. #2

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    Where are you in Connecticut? There are at least a couple of EAA chapters there. Check over at Skylark or Simsbury if you are near Hartford.

    Best of luck,

    Wes

  3. #3
    CarlOrton's Avatar
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    Hi, Keith;

    Texas, of course, is a bit different. Still, somethings are consistent.

    Texas has a "use tax" that is basically another name for sales tax. Specifically, in this case, it's used for items that are purchased outside the state of Texas but "used" within the state. On a side note, if a private seller sells an airplane, that sale is exempt from tax - it's called an "occasional sale." Funny; doesn't work for cars though....

    Anyway, aircraft are not registered in Texas. Dunno about CT. Regarding use tax in TX, you're supposed to send an annual report to the state detailing those items you've purchased out of state, and remit to them the owed tax. If you don't pay the tax (and I know of several builders who've not paid), you're in the clear until the state (maybe) catches up with you. If you have not paid the use tax, and you don't have receipts, the state will gladly determine their own value for the plane.

    Note that only parts are considered *if* you pay annual use tax. Now, this next part is pure conjecture. Consult a lawyah or accountant for official direction. I would concentrate on the main parts, like airframe kits or the raw materials if you are plans-built. Also the engine and avionics. If you bought a 2x2 by 2' length of 6160 off eBay, well, legally you're supposed to report it, but that could probably fall thru the cracks.

    That said, I have *never* heard of someone in TX being pinged by the state to determine if they've paid their use tax. Due to my career and the agencies with whom I've dealt, I elected to pay. And I have my cancelled checks showing I've paid.

    Carl Orton
    Sonex #1170
    http://mykitlog.com/corton

  4. #4
    FlyingRon's Avatar
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    The fly away exemption that you are looking at applies only to aircraft manufactured in CT but sold to an out of state buyer. It doesn't apply to you.
    CT requires you to pay the sales/use tax on your purchases. You do get credit for any taxes paid to another state. I'd keep track of all my receipts and be prepared to fork over any unpaid sales tax on the materials used to build it.

  5. #5

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    Quote Originally Posted by kmacht View Post
    So can anyone give the the details on Use tax on homebuilts registered in connectiut. I have scratchbuilt a sonex and am getting close to needing to register it. I tried reading through the state statutes but it is very confusing. There is an excemption for sale of aircraft and purchase of aircraft parts for aircraft manufacturers in ct. Does building an experimental qualify me as a "manufacturer"? If not, how do I determine how much I have to pay the state? The rate is 6.35% but what is that a percent of? My plane is made up of some parts purchased from the manufacturer, some bought in the state, some bought used from other builders, etc. I have some recipts but not every purchase included a recipt such as a number of "used" parts I bought from another builder. I don't have a nice neat bill of sale for a kit from the manufacturer to send them. I realisticly have about 16k into the plane but most sonex are selling for between 25 and 40k. Someone here has to have been through registering a new experimental aircraft in connecticut before. I just need some direction.Keith
    Call Joe. He is a member of Chapter 166 amoung others. He'll point you in the right direction.


    Joe Gauthier, EAA 31860

    Joe has built four homebuilts and is currently working on a GlaStar. He is an active Technical Counselor and a Flight Advisor in the Connecticut area. Joe is an A & P, CFII, and NAFI Master Flight Instructor specializing in homebuilt transition, instrument and spin training. Joe has made 28 first flights in homebuilts. Joe is a member and officer of Chapter 166 in Hartford, CT. Joe volunteers at AirVenture-Oshkosh every year in the Workshop Plaza. He has been honored with EAA’s Major Achievement Award, EAA’s President’s Award, FAA Region CFI of the year and Safety Counselor of the year. Joe resides in Cromwell, CT, and is retired from Bell Telephone.

  6. #6

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    Texas - Unfortunately all of the northeast states are far far away from Texas in attitude and government. The bad news is that many NE states tax everything. The good news is that we have 4 real seasons and you can go to the beach one day and the mountains the next. I have to report that I flew across Texas from the Arkansas border to Galveston and did not see anything taller than what NH calls a small hill. But I liked the people.

    Best of luck,

    Wes
    N78PS

  7. #7
    CarlOrton's Avatar
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    Quote Originally Posted by WLIU View Post
    Texas - Unfortunately all of the northeast states are far far away from Texas in attitude and government. The bad news is that many NE states tax everything. The good news is that we have 4 real seasons and you can go to the beach one day and the mountains the next. I have to report that I flew across Texas from the Arkansas border to Galveston and did not see anything taller than what NH calls a small hill. But I liked the people.
    I grew up in small town Joisey; took a real adjustment 31 years ago to move to TX. Things I still miss: hills, trees, and the ocean. Oh yeah; even with the mass Yankee migration a few years ago, I still can't find great pizza. Found some decent stuff, but not what I grew up with....

    Carl Orton
    Sonex #1170
    http://mykitlog.com/corton

  8. #8

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    I've heard of an instance in IL where the FAA asked about
    tax payments to the state when they came out to inspect
    the plane. No taxes, no inspection.

  9. #9

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    Jan 2012
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    Thanks for all the replies. I reached out to Joe Gauthier as was suggested and will get clarification from him on the Connecticut specific requirements. Thanks again.

    Keith

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