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Thread: Sales tax on a private sale

  1. #1

    Join Date
    Sep 2012
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    Sales tax on a private sale

    I live in WI and bought an uncompleted project from out of state. Will WI want sales tax on the purchase?

  2. #2

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    Why would they know about it?

  3. #3

    Join Date
    Sep 2011
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    Most states that tax airplanes pick up the information from the FAA when the plane is registered. I would wait until then if your state taxes airplanes. You'll get a bill then I expect.

  4. #4

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    Trussville, Alabama, United States
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    In my state you can get out of paying it if the person selling is not in business as a dealer. You have to write a letter to the right office.

  5. #5
    Depends on the state. To register an airplane in the State of Washington, one has to show that the appropriate Use Tax has been paid. This is about the same percentage as sales tax.

    Ron Wanttaja

  6. #6
    It may be to your advantage to pay sales tax (called use tax in this case, as well, I think) on the uncompleted aircraft. You will be paying sales tax on parts as you complete it and then might have to pay again when you register the airplane. Possible double taxation. Worth further investigation, at any rate.

  7. #7
    Auburntsts's Avatar
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    Dumfries, VA
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    IMO the real advantage of paying tax on the kits/parts before certification is the assessed value. In Virgina (and I assume for most locales) for parts and kits, you pay tax based upon the actual cost of the components. For a completed aircraft you'll pay on the assessesed value which may be greater than the cost of the sum of the parts. And don't think that just because you registered and certified your pride and joy as a Smith-1 when it's really a Lancair IVP that the tax folks aren't savvy enough and willing to do a little homework to figure out the assessed value is representative of the IVP fleet. I'm sure some have been able to pull it off, but taxes is not an area that I personally what to screw around with. In my own case, I submitted receipts for all my major purchases (kit, avionics, & engine) and paid VA Use tax on that total amount which is easily $75K less than what the asseessed value of the completed kit is.
    Todd Stovall
    Aka tsts4 on POA & Matronics, and Auburntsts on VAF, RV Airspace, AOPA, & Purple Pilots
    PP ASEL
    Building an RV-10 N728TT
    My builder's log (which is woefully out of date): www.mykitlog.com/auburntsts
    WAR DAMN EAGLE!

  8. #8

    Join Date
    May 2013
    Posts
    1

    See WI Tax Revenue Pub 201

    Quote Originally Posted by Vetteman89 View Post
    I live in WI and bought an uncompleted project from out of state. Will WI want sales tax on the purchase?
    Absolutely. See WI Dept of Revenue Publication 201, page 75, Occasional sales of Motor vehicles, boats, etc (specifically includes aircraft) are taxable :

    D.

    Occasional Sales of Motor Vehicles, Boats, Etc., Are Taxable
    :
    Occasional sales of motor vehicles, boats, snowmobiles, recreational vehicles, trailers, semi trailers, all
    terrain vehicles, and aircraft are taxable unless sold to the spouse, parent, stepparent, father-in-law, mother
    -in-law, child, stepchild, daughter-in-law or son-in-law, of the seller, and then only when the unit was previously registered or titled in Wisconsin in the name of the seller.

    The purchaser must pay any tax due at the time the unit is registered or titled for use in Wisconsin. The
    purchaser of a motor vehicle, recreational vehicle, trailer, or semitrailer files Form MV-1, “Applic
    ation for Title/Registration,” with the Department of Transportation and pays any tax due. The purchaser
    of an aircraft pays any tax due to the Department of Transportation with the “Application for Aircraft Registration or Exemption.”
    Last edited by mgarrard; 05-01-2013 at 10:11 AM.

  9. #9

    Join Date
    Oct 2011
    Location
    New Hampshire
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    The Wisconsin form may be found at http://www.dot.wisconsin.gov/travel/air/docs/dt1556.pdf

    It says "Amateur Built Fee = $50". Looks pretty good. After all, Wisconsin is the home of EAA.

    Best of luck,

    Wes
    N78PS

  10. #10
    The State of New Mexico has no use tax and no sales tax on an aircraft sale between individuals a.k.a. private sale. Only an annual registration fee based on the gross weight and age of the plane. $.02/lb for a plane in it's first two years. $.015/lb for an aircraft 2 - 4 years old. And $.01/lb of gross weight for a plane 5 years old or older. For those that are math challenged, that means your freshly finished 2000# gross weight plane will cost $40 a year for 2 years, $30 a year for the next 2 years, and $20 a year there after. There are no other state fees or taxes. Or your freshly purchased 1320# light sport plane that is 5 years old will cost a whopping $13.20/year.

    -CubBuilder

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