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The Taxman cometh

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n113gb(at)yahoo.com
Guest

Posted: Mon Nov 27, 2006 9:56 am Post subject: The Taxman cometh

Things just keep getting better in the land of taxes, oops, I mean Wisconsin. Shortly after registering my Kitfox with the FAA, a notice from the Dept. of Revenue shows up in my mailbox demanding their piece of the action. Within 2 weeks another letter is send with a deadline of 10 days for payment of the taxes due and a threat of lien placement. I went on to explain that the Kitfox is still in kit form and is a non-airworthy aircraft that is being build in my garage at home.  So then comes the audit notice (10 days later) that states that they demand to see all of my receipts because they "understand that a lot of parts and materials must be purchased in order to complete the aircraft. Verification that the sales tax has been paid must be presented". I am sure that others of us have confronted the same issue. Any ideas to help make this any less painful? I realize that each state and municipalities have separate tax laws, but I am looking for any helpful advice. 

 

This is just one more way that the government is making flying increasingly unaffordable. What is so amazing is that this plane may never touch a public runway or use any public facility, but yet the registration/tax notices keep coming. 

 

On the other hand, it is still cheaper than most countries.  

 

Gary O.

Oshkosh S7

wahlquist(at)ics.uwex.edu
Guest

Posted: Mon Nov 27, 2006 10:44 am Post subject: The Taxman cometh

Hey Gary and all,

Similar problem...Same state,Wisconsin.

My situation is that I picked up a damaged N numbered Kitfox a few years 

ago. Had the registration with the FAA changed to me no problem. I asked 

the state guys if I needed to register it right away and was told to wait 

until it is airworthy and do the full registration then. I paid $10.00 and 

registered it as un-airworthy and thought I was all set. Well a year or 

more goes by and the state vehicle dept. says that they conducted an audit 

and have found my aircraft is not registered. I let them know that it was 

registered as un-airworthy some time back. They say they have no record of 

it. After a lot of phone calls etc. I finally send them another $10.00 to 

register it again as un-airworthy. I was told by several motor vehicle reps 

that if it is un-airworthy that no tax was due at that time. Well the Dept. 

of Revenue conducts an audit and now finds that there is an aircraft that 

has been registered but no taxes were collected. So they start sending me 

nasty grams similar to yours requesting that I send them whatever money 

they are due. They leave it to us to figure that amount out but after 

discussion with a revenue agent they determined that I owe not only the 

amount of tax on the original un-airworthy aircraft purchase but PENATIES 

for late payment, and interest.



I have yet to work this out and make everyone happy but it looks like the 

easy way is to just pay the tax and penalties and be done with it.

Any advise from anyone would be appreciated.



Dave Wahlquist

Mod III pile of parts with taxes due....



At 11:55 AM 11/27/2006, you wrote:

 	  Quote: 	
		  



Things just keep getting better in the land of taxes, oops, I mean 

Wisconsin. Shortly after registering my Kitfox with the FAA, a notice from 

the Dept. of Revenue shows up in my mailbox demanding their piece of the 

action. Within 2 weeks another letter is send with a deadline of 10 days 

for payment of the taxes due and a threat of lien placement. I went on to 

explain that the Kitfox is still in kit form and is a non-airworthy 

aircraft that is being build in my garage at home.  So then comes the 

audit notice (10 days later) that states that they demand to see all of my 

receipts because they "understand that a lot of parts and materials must 

be purchased in order to complete the aircraft. Verification that the 

sales tax has been paid must be presented". I am sure that others of us 

have confronted the same issue. Any ideas to help make this any less 

painful? I realize that each state and municipalities have separate tax 

laws, but I am looking for any helpful advice.



This is just one more way that the government is making flying 

increasingly unaffordable. What is so amazing is that this plane may never 

touch a public runway or use any public facility, but yet the 

registration/tax notices keep coming.



On the other hand, it is still cheaper than most countries.



Gary O.

Oshkosh S7

experimental208nd(at)comc
Guest

Posted: Mon Nov 27, 2006 11:11 am Post subject: The Taxman cometh

Actually in Taxachussetts, we donot have to pay sales tax on Aircraft ( 

Right after I registered mine of course).



Just to let you know

Jay

---

n113gb(at)yahoo.com
Guest

Posted: Mon Nov 27, 2006 11:55 am Post subject: The Taxman cometh

I would like to add one point to my original message. I understand the need for the state to bring in revenue, I probably would not be quite so uptight about this if it were not for the fact that the sales tax goes directly into Wisconsin's general fund and the registration fees go into the D.O.T. fund. If these fees/taxes went back into maintaining and operating the airport system, I would be more accepting of the exorbitant fees associated with owning my aircraft in this state.

 

Gary



---

crazyivan

Joined: 25 Aug 2006
Posts: 62
Location: Pensacola

Posted: Mon Nov 27, 2006 1:03 pm Post subject: Re: The Taxman cometh

Here's some refresher training for all of us when dealing with these moronic, pin-head, bureaucrats:



1. Always get the name (first and last) and telephone number/extension of the person who is telling you what to do.

2. Get it in writing from him or have them cite a reference that you have access to (the State's tax law).

3. If it's good news then make sure you follow steps 1 and 2 or some moron from the cubilce next to the guy you originally talked to will write you a nasty-gram and threaten a lien on your property in a year.



If you are reading this, and you resemble the above-mentioned pin-headed bureaucrat, and have access to my files, I'm just kidding...I love you guys.

_________________
Dave
Piper PA-22/20

Rex Hefferan

Joined: 10 Jan 2006
Posts: 147
Location: Olney Springs, Colorado USA "NOT a Kitpig"

Posted: Mon Nov 27, 2006 1:45 pm Post subject: The Taxman cometh

IMHO It sounds like the same kind of property tax model similar for 

motor vehicles. For instance if you built a kit car from junk parts and 

a kit chassis you could decide what it's value was based on whatever 

receipts you might provide. It sounds like you can specify what the 

value is by showing only sales receipts for the basic kit or whatever 

you decide to show them. If it's like most states I think you will go to 

your county DMV office and will encounter a clerk that wouldn't know a 

Kitfox from a Quicksilver. Later you might provide more receipts that 

would increase the taxable value if you wish. I don't think any state 

Dept. of Revenue will continue to hound you for additional receipts 

however. They may just continue to hit you for the yearly registration 

fee based on what you originally provided. They probably won't send an 

expert out to see the airplane because I doubt they have any.

 I call to the appropriate office to ask hypothetical questions might 

prove enlightening.



Rex

Colorado



GAry Olson wrote:



 	  Quote: 	
		  



Things just keep getting better in the land of taxes, oops, I mean Wisconsin. Shortly after registering my Kitfox with the FAA, a notice from the Dept. of Revenue shows up in my mailbox demanding their piece of the action. Within 2 weeks another letter is send with a deadline of 10 days for payment of the taxes due and a threat of lien placement. I went on to explain that the Kitfox is still in kit form and is a non-airworthy aircraft that is being build in my garage at home.  So then comes the audit notice (10 days later) that states that they demand to see all of my receipts because they "understand that a lot of parts and materials must be purchased in order to complete the aircraft. Verification that the sales tax has been paid must be presented". I am sure that others of us have confronted the same issue. Any ideas to help make this any less painful? I realize that each state and municipalities have separate tax laws, but I am looking for any helpful advice. 

 

This is just one more way that the government is making flying increasingly unaffordable. What is so amazing is that this plane may never touch a public runway or use any public facility, but yet the registration/tax notices keep coming. 

 

On the other hand, it is still cheaper than most countries.  

 

Gary O.

Oshkosh S7

 

  




	


-- 

Karla and Rex Hefferan

Gypsy Bee Innkeepers

719-651-5198 or 719-651-9192

_________________
Rex
N740GP - M2/582
Colorado

wahlquist(at)ics.uwex.edu
Guest

Posted: Mon Nov 27, 2006 2:17 pm Post subject: The Taxman cometh

In my case they actually needed pictures before they would allow the 

un-airworthy registration. If it was a certified airplane they said they 

would need a sign off of un-airworthy from an  A&P or IA. Using their logic 

if you purchased a  Subaru or any other auto which was crashed with the 

intent of using the motor in a project you would have to pay the tax on the 

car purchase and also on the value of the car when you did the aircraft 

registration. In Wisconsin I have been asked to prove my purchase price 

when I have found real good deals on cars. They don't want to miss out on 

any tax by someone misreporting the purchase price. Oh and don't forget to 

pay the tax due on all those Ebay and Barnstormers purchases..Yeah right...

Dave

At 03:43 PM 11/27/2006, you wrote:

 	  Quote: 	

  IMHO It sounds like the same kind of property tax model similar for 

 motor vehicles. For instance if you built a kit car from junk parts and a 

 kit chassis you could decide what it's value was based on whatever 

 receipts you might provide. It sounds like you can specify what the value 

 is by showing only sales receipts for the basic kit or whatever you 

 decide to show them. If it's like most states I think you will go to your 

 county DMV office and will encounter a clerk that wouldn't know a Kitfox 

 from a Quicksilver. Later you might provide more receipts that would 

 increase the taxable value if you wish. I don't think any state Dept. of 

 Revenue will continue to hound you for additional receipts however. They 

 may just continue to hit you for the yearly registration fee based on 

 what you originally provided. They probably won't send an expert out to 

 see the airplane because I doubt they have any.

I call to the appropriate office to ask hypothetical questions might prove 

enlightening.

Rex

Colorado

GAry Olson wrote:

>

>

>Things just keep getting better in the land of taxes, oops, I mean 

>Wisconsin. Shortly after registering my Kitfox with the FAA, a notice 

>from the Dept. of Revenue shows up in my mailbox demanding their piece of 

>the action. Within 2 weeks another letter is send with a deadline of 10 

>days for payment of the taxes due and a threat of lien placement. I went 

>on to explain that the Kitfox is still in kit form and is a non-airworthy 

>aircraft that is being build in my garage at home.  So then comes the 

>audit notice (10 days later) that states that they demand to see all of 

>my receipts because they "understand that a lot of parts and materials 

>must be purchased in order to complete the aircraft. Verification that 

>the sales tax has been paid must be presented". I am sure that others of 

>us have confronted the same issue. Any ideas to help make this any less 

>painful? I realize that each state and municipalities have separate tax 

>laws, but I am looking for any helpful advice.

>This is just one more way that the government is making flying 

>increasingly unaffordable. What is so amazing is that this plane may 

>never touch a public runway or use any public facility, but yet the 

>registration/tax notices keep coming.

>On the other hand, it is still cheaper than most countries.

>Gary O.

>Oshkosh S7

>

--

Karla and Rex Hefferan

Gypsy Bee Innkeepers

719-651-5198 or 719-651-9192

GENTRYLL(at)aol.com
Guest

Posted: Mon Nov 27, 2006 2:22 pm Post subject: The Taxman cometh

Mine is even worse in Mississippi.  I purchased a kit that was barely  started.  I got the engine from another source, the fabric another, the  instruments another, etc.  I got the notice from the tax folks and told  them I didn't buy a plane, I bought a lot of parts from different sources.   They said "Oh, in that case the tax on parts is 7% instead of the regular 3% on  a flying plane". Oh well !!!

  [quote][b]

Guy Buchanan

Joined: 16 Jul 2006
Posts: 1204
Location: Ramona, CA

Posted: Mon Nov 27, 2006 2:50 pm Post subject: The Taxman cometh

At 09:55 AM 11/27/2006, you wrote:

 	  Quote: 	
		  Any ideas to help make this any less painful? I realize that each state 

and municipalities have separate tax laws, but I am looking for any 

helpful advice.


	


My recommendations based on personal experience which I will never relate 

in any fashion that can be recorded anywhere:



1. If you are like me you are exceptionally stupid and disorganized and had 

no idea you were supposed to keep records of any kind. Ask lots of questions.

2. Contact a proficient attorney. I'm assuming you owe sales taxes just as 

you would if you bought anything in Wisconsin, but there might be some kind 

of exemption for aircraft, or for kits or for interstate commerce, etc.

3. Ask the State to estimate the taxes owed NOW; they know it. (They 

probably got it from Skystar or KitfoxLLC.) In at least ONE state there is 

NO requirement that an individual maintain permanent records of any kind, 

for any reason. There is, of course, also no requirement that you remember 

how much you paid for anything, let alone have a hard copy receipt. 

(Corporations, yes; individuals, no. See the attorney for Wisconsin laws.)

4. Pay the taxes owed now, now. They only go up. Save that record.

5. I doubt the state can force you to continuously send them future 

receipts for audit; they can usually only conduct audits of past activity. 

If you don't keep records, the only thing they can audit is the records of 

the corporations with which you deal. (See the attorney.)



Good Luck,

Guy Buchanan

K-IV 1200 / 582-C / Warp / 100% done, thanks mostly to Bob Ducar.



Do not archive

_________________
Guy Buchanan
Deceased K-IV 1200
A glider pilot too.

lcfitt(at)sbcglobal.net
Guest

Posted: Mon Nov 27, 2006 3:25 pm Post subject: The Taxman cometh

A thought here.  Wisconsin is a state where arguably the biggest event in 

the state, unless the Packers are in the Super Bowl, is Airventure. 

Everyone there is aware of what a Home Built airplane is and all the 

ramifications - receipts beyond the kit price and on and on.  I guess living 

too close to Mecca might just put oneself in the spotlight.



I had an interesting tax situation here in Calif where I was forgotten for 

about four years and due to my fear of penalties, I did a bit of research, 

made an appointment with the tax guy, met with him with my documents and 

proceeded to wait another three years before they hit me with the tax bill. 

After some gentle protestations, all came out OK as the tax was fair and 

only for the current year.



Lowell



---

MichaelGibbs(at)cox.net
Guest

Posted: Tue Nov 28, 2006 9:02 am Post subject: The Taxman cometh

After I registered my IV with the FAA I got a notice from the state 

of Arizona saying they wanted money, too.  I informed them that it 

was not an airplane but a pile of parts that might eventually become 

one (which was true!).  They told me to let them know when it 

actually became an airplane.



I'm pretty sure I did that...  



Mike G.

N728KF

jconnell(at)rconnect.com
Guest

Posted: Tue Nov 28, 2006 9:07 am Post subject: The Taxman cometh

Regarding taxes in neighboring Minnesota.

  

 I built my Kitfox a number of year ago.  When

 I got my tail number from the FAA, the State of

 Minnesota promptly asked for proof of sales or

 to pay use taxes.  I ended up paying "use" taxes on

 my component purchases (engine, prop, airframe.)

 Since I had deferred payment of taxes a late

 payment fee was assessed but set aside.

  

 I'm now building an RV-9A and have the N number

 reserved.  The State of MN is aware of this and 

 is again seeking my use taxes if I can't show I paid 

 taxes when the components were purchased.  For me

 it is now "pay as you build" on taxes as I'm building

 the plane.

  

 In the end "The Taxman  win-ith..."



   [quote][b]

Float Flyr

Joined: 19 Jul 2006
Posts: 2704
Location: Campbellton, Newfoundland

Posted: Tue Nov 28, 2006 12:18 pm Post subject: The Taxman cometh

Mike:



I don't know how your tax department accesses things or for that matter the

FAA either.  



In this country legally speaking the airplane itself is actually not the

fuselage, the engine, the wings or the tail but the data plate that says it

is a plane....  Everything else is considered to be attached to the data

plate.  The data plate is worth what?????  $5.00  Everything else is an

appliance to the plane and should only be taxable after it is attached to

said plane.  



If you pay your tax as you purchase your parts at 7% as one poster said than

the tax man actually owes him 4% as soon as that part is attached to his

plane.  I can smell a loophole there and I bet a good accountant will open

it for you.



The problem all flyers and plane owners have is they are thought of as being

very wealthy so it is not surprising that the tax man will have a hunting

agenda with us as his quarry.  Borders not withstanding!



Noel



[quote] --

_________________
Noel Loveys
Kitfox III-A
Aerocet 1100 Floats

dan(at)azshowersolutions.
Guest

Posted: Tue Nov 28, 2006 3:58 pm Post subject: The Taxman cometh

Yup, Same thing happend to me today. I registered and got my tail # from the FAA not long ago and I received the registration App. from the AZ 

  DOT. I called them today and mentioned it was a kit. I was told to send the registration paper in with a note stating it was a kit. As soon as it is deemed airworthy, they want to hear from me. Surprisingly done the way it should be.

  Dan, Mesa AZ



Michael Gibbs <MichaelGibbs(at)cox.net> wrote:

  [quote]--> Kitfox-List message posted by: Michael Gibbs 



After I registered my IV with the FAA I got a notice from the state 

of Arizona saying they wanted money, too. I informed them that it 

was not an airplane but a pile of parts that might eventually become 

one (which was true!). They told me to let them know when it 

actually became an [quote][b]

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