Sales tax on a private sale

[Mike M]

Why would they know about it?

[Wilfred]

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.

[Antique Tower]

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.

[rwanttaja]

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

[Al Burgemeister]

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.

[Auburntsts]

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.