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Florida Tax Issue

Randy

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I copied the following from one of my rotary engine sites. I know nothing about it other than what I read here. For the amount of $$$ potentially involved it is something to consider and check out.
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If you are traveling there by Plane, boat, or motor vehicle and it is
less than a year old you better have proof for the Florida tax man that
you paid sales tax in your home state at least equal to Florida's or
your ride might be stuck there until the tax is paid... seems they are
getting desperate for money and ignore case law for Interstate Commerce.

-dave Arbogast

From - http://www.eaa242.org/

Florida Tax Ripoff Results In Growing Pilot Avoidance/Boycott of State
And Get This... Yet ANOTHER Reason To Avoid Sun 'n Fun!

Since ANN broke the bewildering details of a number of long-suffering
non-resident pilots who have been caught in the FL tax trap, (otherwise
known as the "Florida landing Fee"), we have learned that a full-fledged
tax revolt is now underway costing the state untold monies as a result
of a growing voluntary boycott that is gaining steam, even as we write this.

Over the course of our investigation last year, ANN learned of a number
of issues that have arisen when owners of new aircraft, generally within
the first six months of the sale, have been targeted for "use tax" by
agents of the state's Department of Revenue... despite the fact that the
targeted aircraft were not owned or operated by state residents.

It starts like this... you buy a new or used aircraft and sign the bill
of sale... which starts "the clock." It is Florida's position that for
the next six months (possibly thereafter, though the burden of proof
reportedly changes at that point), the state has the right to exact the
requisite "Use Tax" (Sales Tax) for the fact you partook of the state's
services unless you can show an equivalent Use or Sales Tax receipt from
another state...

In other words, for those of you who may have bought a $500K Cessna,
Cirrus, Columbia, etc... unless you can prove that you paid the
equivalent use tax in another state, you owe the state of Florida some
$30K if you visited the state in the first six months of your ownership.
Mind you, if your sales/use tax bill comes from a state that exacts LESS
tax than Florida, the FL Department of Revenue still expects you to pony
up the difference... and if you're from a state that exacts a minimum
fee (like the few hundred dollars for owners in South Carolina), they
will bill you for the WHOLE difference... and its up to you to fight
them on it.

No kidding.

It makes NO difference to the state if you have any property in Florida,
or whether you bought the airplane there, or if you have ANY business
interests whatsoever in the state... If Florida catches you here and if
they can find a way to stick you with a tax bill, they will.

According to the Florida Tax Code, "There shall be a presumption that
any aircraft, boat, mobile home, motor vehicle, or other vehicle
purchased in another state, territory of the United States, or the
District of Columbia but titled, registered, or licensed in this state
is taxable except as otherwise provided in subsection (26) of this rule.
This presumption may be rebutted only by documentary evidence that the
person owning the aircraft, boat, mobile home, or motor vehicle
purchased the aircraft, boat, mobile home, or motor vehicle in another
state, territory of the United States, or the District of Columbia six
(6) months or more prior to the time it is brought into this state. In
order for such property to be presumed exempt as purchased for use
outside Florida, the person owning the aircraft, boat, mobile home,
motor vehicle, or other vehicle must provide documentary proof that such
property was used in other states, territories of the United States, or
the District of Columbia for six months or longer under conditions which
would lawfully give rise to the taxing jurisdiction of another state,
territory, or District of Columbia and any lawfully imposed tax was paid
to such state, territory, or District of Columbia before being imported
into this state. However, the rental or lease of any aircraft, boat,
mobile home, or motor vehicle which is used or stored in this state is
taxable without regard to its prior use or tax paid on the purchase
outside this state."

Why?

Because they can.

The very liberal Florida tax code allows them to tax aircraft if they
operate at any time during the first six months of a purchase in the
state... and according to some interpretations, there may be some legal
justification for Florida to tax you if you so much as fly OVER the state.

This problem has been known for a while, but 2007 ramp checks by FL DOR
personnel were reportedly stepped up, and snagged a number of unwary
owners -- including at least one Cirrus owner and a Meridian owner who
came back to Florida to undertake flight training in his new airplane.
The Cirrus owner was on the hook for some $30K in additional taxes...
the Meridian owner wound up paying over $100K.

Now, the situation is getting widespread attention from a group of
Cirrus owners who want to attend a group flying activity that will put
them in FL overnight as well as others who are now deciding to avoid the
annual Sun 'n Fun Fly-In... which really doesn't need any more trouble
than it's already made for itself (ANN E-I-C Note: the event is in very
serious decline and its survival is not only in doubt, but the odds
appear stacked against it. Worse, it has some serious safety issues that
still need to be addressed).

One Cirrus owner, who called ANN, reported that he's made a number of
calls to FL officials and still feels that the risk to his financial
health is "unacceptable" and that he feels that FL's tactics appear to
be "predatory." When he called Sun 'n Fun offices for help, he received
a deaf ear. The Owner/Pilot has reported that he told SnF staffers that
"I had cancelled plans to be in Florida during the event and would not
be able to visit Sun-N-Fun because of the DOR issue."

He added that he, "... gave the gentlemen I spoke to a very brief
description of the issue and asked him if they were doing the
responsible thing and (notify) their attendees of this potential trap.
He quickly told me I better speak to someone else about this and
transferred me to another phone. No one answered the phone and it went
to voice mail. I repeated a short description of the issue, gave him my
name and contact phone number and have heard nothing since. The curious
thing is that there was an awful lot of background discussion going on
before I was transferred to voice mail..."

Other pilots report a similarly deaf ear, and even disconnects, when
they call Lakeland for assistance. For those familiar with the usual
quality of SnF "service," this is hardly a surprise.

But... there is a white knight on the horizon. The Florida Aviation
Trades Association has been aggressively lobbying the state in order to
get this rule-making stricken from the ledger in upcoming sessions of
the state legislature. Late Thursday, FATA's President Michael Slingluff
(another one of the 'hardest working guys in GA'), and FATA Executive
Director Paula Raeburn informed ANN that, "The Florida Aviation Trades
Association, FATA, who represents general aviation business and
interests in Florida, has been following the sales/use tax issue and is
diligently working with the Florida State Legislators and the Florida
Department of Revenue (FDOR) is resolve this issue once and for all. We
had a small success in Tallahassee today as HB 1379 passed through one
committee. It has been an uphill battle but FATA has been tenacious in
their efforts. Any changes will be effective July, 2008 so in the short
term, there is no relief but we hope to have success during this year's
legislative session. The intend of the statute was not keep pilots out
of Florida but that is happening and we have made legislators and FDOR
aware of the issue. Florida depends on tourist dollars and we want new
aircraft owners to be able to fly here and enjoy all Florida has to offer."

FATA fully expects the tax situation to be repealed at some point, but
that progress remains "dreadfully" slow. In the interim, the rule
remains highly selective. In a May 2007 phone con, ANN chatted with a
spokesperson for the FL DOR, Rene Watters, who was clearly unapologetic
for the issue. She told ANN that they are simply 'doing (their) jobs'
and that if anyone has a problem with that, to "take it up with the
legislature." This matter, of course, can be appealed through the
courts... but this route necessitates expensive and time consuming
litigation, via the use of a trained tax attorney... and you may still
lose, after all.

Catch 22.

Other DOR staffers opine that aircraft owners have it particularly hard,
since they admit that RVs and boats get a somewhat more permissive
treatment from them, "...Probably due to better lobbying on the part of
their industry reps."

In the meantime, ANN has documented extensive tales of pilots who are
avoiding the state of Florida like the proverbial tax plague. Worse; a
number see the problem as a safety of flight issue that could subject
the state to potential liability. "If I have to fly farther, or through
worse weather, to avoid the possibility of unfair tax penalties, who's
responsible if I have a problem and an accident results because I didn't
want a single flight to cost me $50,000 dollars?," asked one flyer.

Dozens of pilots have reports cancellations of trips to Florida and over
100 pilots have questioned the wisdom of visiting this spring to go to
Lakeland -- for a number of reasons. "While Oshkosh is a 'must',
Lakeland really hasn't been any fun for years. It's always been too
expensive but the chance of a big tax bill just makes it damned
ridiculous. So, this is one more reason that Lakeland isn't going to be
on my travel schedule any time soon," added one Cirrus owner.

ANN Synopsis: ANN has calls into the State officials as well as FL
Governor Charlie Christ, in order to seek additional information and
guidance on the matter, but to be honest, if you have an airplane that
is NOT based in FL, and is less than 6 months old (or even close to
that), we'd give FL a wide berth until this Draconian taxation issue is
resolved fairly and ethically... and as fair as Lakeland is concerned,
it sure doesn't seem to be worth the price of admission anymore, much
less the potential of a multi-thousand dollar tax bill. For this and
quite a number of other reasons, we suggest giving Lakeland a pass.
FMI: Click Here To Learn More, www.fata.aero
Reprinted from: Aero-News.Net

 

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