Pennsylvania sales tax of 6 percent.

[Thechap]

I know I had read that gyrocopters were exempt from Pennsylvania sales tax, but just can't remember where. Well, I got a letter from the Pa. Department of Revenue requesting 6% sales tax for the Gyro I bought earlier in the year. I recently had the Gyro registered in my name with the FAA.

Anyone with any ideas whether or not this purchase is exempt, and if it is exempt what code/regulation should I quote?

Thanks,

Thechap

[Bumperdog]

Originally Posted by Thechap

I know I had read that gyrocopters were exempt from Pennsylvania sales tax, but just can't remember where. Well, I got a letter from the Pa. Department of Revenue requesting 6% sales tax for the Gyro I bought earlier in the year. I recently had the Gyro registered in my name with the FAA.

Anyone with any ideas whether or not this purchase is exempt, and if it is exempt what code/regulation should I quote?

Thanks,

Thechap

hey Bryan, I just got notice from the Pa dept. of revenue too. They wanted their 6% of the MZ202 that I bought from Canada. It would be nice if you are right about the exemption.

[Timchick]

Originally Posted by Bumperdog

hey Bryan, I just got notice from the Pa dept. of revenue too. They wanted their 6% of the MZ202 that I bought from Canada. It would be nice if you are right about the exemption.

How did they find out about the MZ202 purchase?

[Bumperdog]

Originally Posted by Timchick

How did they find out about the MZ202 purchase?

Radial Compact in Canada, wouldn't send the engine unless I gave them my name address and social security because customs people at the border are required to notify the state dep. of revenue. It took a year for them to get me. I purchased the engine from Hoverhawk corp.

[Ron Iaconis]

Bruce,
In Penna, When I purchased my gyro back in 1984,,,,I got a letter from tax people Requesting taxes,,,,I decided to take a pic of the machine and that I brought into the state in parts and pieces and the taxes were paid in the state of origin,,,,,,, anyway I never got a letter back and they never bothered me again,,,and I lived in Pa till 1995,,,so good luck
Ron

[L_Butler]

I'm afraid you can't believe everything you read on the internet. Gyroplanes are not exempt.

When I got my registration from the FAA, the feds sent notice to PA. The dept of revenue wanted 6% of the purchase price. Since mine was homebuilt, most of the tax was already paid to local suppliers.

I sent them a letter stating that most of it was already paid to local suppliers and sent them a check for the stuff I bought from Aircraft Spruce. They haven't bothered me since.

If you don't pay in 90 days they will hit you with penalties and interest.

Larry

[Vance]

I am not a tax professional and what I am describing is entirely anecdotal.

In California where the sale takes place has to do with how the tax is charged. When I would sell a part for a motorcycle the sales tax would go to the county where the counter that I sold the part over was. When I sold a motorcycle the tax would go to the county where the motorcycle was registered. The counties each had different tax rates so we had to be very careful to collect the correct tax.

It the motorcycle was purchased out of state the state in which it was registered would generally collect the sales tax.

It is my understanding that at some point aircraft owners were getting hit for sales tax in the state they bought the aircraft and the state where it was registered. It is my understanding that this is mostly not happening any longer.

It appears to me there is still some inconsistency as to where the aircraft is based and sales tax.

In some states they tried to say that if an aircraft was at an airport more than some arbitrary amount of time the owner owed sales tax.

They soon found out that rich people stopped visiting their state and backed off of this concept.

We as aircraft owners live under this battle ground and have to deal with the fallout.

It appears to me that the tax law was written by lawyers who could not make it in private practice driven by a lust for new revenue streams.

I always consult a tax professional before I send any money to the government.

Thank you, Vance

[CLS447]

Here is what I posted.....................

http://www.rotaryforum.com/forum/showthread.php?t=30497

[Bumperdog]

Here is what I found.Sales and Use Tax Exemption for Helicopters and Parts

House Bill 1531 adopts a new sales and use tax exemption that applies to helicopters and similar rotorcraft, as well as to repair and replacement parts (including installation of such parts) for use in helicopters and similar rotorcraft, or in overhauling or rebuilding of helicopters and similar rotorcraft or components thereof.

[L_Butler]

The latest version does indeed exempt helicopters and similar rotorcraft from sales tax. It was initially proposed then scratched out in a subsequent session and then reinserted.

I'm sure there was no quid pro quo. Our legislators wouldn't do anything like that.

You can see the history here:
http://www.legis.state.pa.us/cfdocs/...type=B&bn=1531

Larry

[Thechap]

Well just got off the phone with the Pennsylvania Department of Revenue and confirmed that all Rotorcraft as well as repairs and parts ARE EXEMPT from the Sales and Tax Use. The Governor signed the Bill on 10/09/2009.

Thechap

[Sheldon]

Originally Posted by Ron Iaconis

Bruce,
In Penna, When I purchased my gyro back in 1984,,,,I got a letter from tax people Requesting taxes,,,,I decided to take a pic of the machine and that I brought into the state in parts and pieces and the taxes were paid in the state of origin,,,,,,, anyway I never got a letter back and they never bothered me again,,,and I lived in Pa till 1995,,,so good luck
Ron

Better have a recept Michigan did the same thing to me as soon as I n numbered my pile of parts, they assigned a value to a completed aircraft, and wanted to tax me on that ammount, which was about 5 times what I had paid.

Private sales are usually exempt from sales taxes, however no so if there is some kind of registration involved, so several phone calls later, I had it resolved, and yes they did ask for a copy of the sales receipt to prove my claim.

[Bumperdog]

Bryan, Don't pay the tax, file an appeal form that you can get online. They said I would get a refund if I sent them the form.

[barnstorm2]

If you buy a USED aircraft from an INDIVIUAL (not a dealer) most states consider this a "casual sale" and is exempt from Use Tax.

However, most state tax depertments will still try to collect this tax, preying on the fact most people don't know about casual sale exemptions.

I have more information about this, along with an example letter for the state of Ohio in my book.

.

[Doug Riley]

A true "use" tax applies to -- well -- the USE of the thing inside the state. It's more like a real-state tax than a mere sales tax.

Therefore, a true "use" tax applies regardless of where the thing was bought. In fact, if you built it yourself at zero cost and then used it, tax would be due as long as the finished gadget was worth something.

I went through this decades ago with the Connecticut Tax Dept. As others have posted, the states get information about N-number registrations from the FAA. I received a notice in the mail from the State. I then called them and explained that I built my gyro, I didn't buy it (use tax still due) but that I'd built it from bits and pieces on which I'd generally paid sales tax. When they learned that I'd spent a total of about $950 (true at the time), they lost interest in the potential $47.50 tax and did not get in touch again.

Political pressure complicates this simple theory. There are usually a gazillion exemptions, favoring those businesses that have "pull" in the state. There's usually a credit for sales tax paid at the time of purchase in another state. I think a state could eliminate this credit if it wanted to get greedy. It would set up a tax war with its neighbors if it did, though.