Ad valorem tax?

Maryland is six percent. I spoke with the man who decided what amount my airplane should taxed. I found he knew nothing about airplane sale prices, had never heard of trade a plane, barnstormers, etc. I demanded to speak with his boss. His boss, a woman, listened intently and agreed to call AOPA. She returned my call several days later and apologized profusely for her underlings inability to arrive at a correct tax due to his obvious ignorance. She was not willing to say how she would replace the dullard but did drop the tax on my plane by 1000.00 which was a lot of money on a taylorcraft! I'm sure he's still there as a state employee is almost impossible to fire. ( he had no idea what he was doing! scary)
 
Last edited:
Jimmy cooper said:
Maryland is six percent. I spoke with the man who decided what amount my airplane should taxed. I found he knew nothing about airplane sale prices, had never heard of trade a plane, barnstormers, etc. I demanded to speak with his boss. His boss, a woman, listened intently and agreed to call AOPA. She returned my call several days later and apologized profusely for her underlings inability to arrive at a correct tax due to his obvious ignorance. She was not willing to say how she would replace the dullard but did drop the tax on my plane by 1000.00 which was a lot of money on a taylorcraft! I'm sure he's still there as a state employee is almost impossible to fire. ( he had no idea what he was doing! scary)
Click to expand...

Is that a one-time use tax, or is it an annual ad valorem tax?
 
James331 said:
As of Nov 1 there is no sales or usage tax in NY.
Click to expand...

Serious? How did that slip under the radar? New York used to have tax holiday weeks, usually around back-to school shopping time and limited to certain clothing. This was mostly to compete with NY and NJ who have no sales tax on clothing. I have heard nothing of a wholesale repeal of the sales & use tax.
 
Jimmy cooper said:
One time tax. Many people register their airplane in Delaware for this reason.
Click to expand...

Many state tax revenue office are wise to this. They have been known to troll the ramps and flightaware looking for new and regular tail numbers.
 
wsuffa said:
Virginia has both the use tax and annual ad valorem tax.
Click to expand...

"annual ad valorem tax" wow, an annual added value tax? Taxation moves in it's own way I suppose...
 
Clark1961 said:
"annual ad valorem tax" wow, an annual added value tax? Taxation moves in it's own way I suppose...
Click to expand...

Not "added value" but taxed on the value of the vehicle each year.

In Virginia, the annual tax rate is established by each county. Some counties are very high on aircraft, some are very low. Same with boats, cars and business personal property. In some places, it adds up very quickly with airplanes. Annual personal property tax goes to the county.

Virginia also has a one-time "sales/use" tax that's charged when the plane is purchased or moved into state. That money goes to the state.

And there's a nominal annual aircraft registration fee.
 
wsuffa said:
Not "added value" but taxed on the value of the vehicle each year.

In Virginia, the annual tax rate is established by each county. Some counties are very high on aircraft, some are very low. Same with boats, cars and business personal property. In some places, it adds up very quickly with airplanes. Annual personal property tax goes to the county.

Virginia also has a one-time "sales/use" tax that's charged when the plane is purchased or moved into state. That money goes to the state.

And there's a nominal annual aircraft registration fee.
Click to expand...

If it's on the value of the property then it is a property tax, not an ad valorem tax. Ad valorem taxes have a long history outside the US and are based on the increase in value of an item. Twisting the use of the name of the tax in the US is just typical political subterfuge.
 
The point is there are too many taxes supporting the lazy and incompetent.
 
Jimmy cooper said:
One time tax. Many people register their airplane in Delaware for this reason.
Click to expand...

Heh. They do this at their peril.

The great thing about registering your plane in Delaware is that when, eventually, your true home state figures it out (and they will), you not only get to pay the tax you should have been paying all along - you also get to pay penalty and interest! It's really groovy.

You can double-down on the stoopid by holding your plane in a Delaware (or Nevada or whatever scam-du-jour state some "consultant" is hawking) LLC or corporation - then, you've created a presumption that your plane is a business asset, which triggers tax which otherwise might not have been due. Plus corporate reporting and (potential) tax in your home state.

And you're still obliged to make tax filings in the register state.

---

Repeat after me: "I cannot legally avoid tax on my airplane, by registering it in another state."

There. Wasn't that easy?
 
What I really hate about any sort of property tax is its absolute unfairness. Assume that two people both make the same income and pay the same income tax on that income. Person 1 then throws his take home income away on partying and other frivolous things. Person 2 uses a good portion of his take home pay to buy property whether it be a house, plane or something else that has lasting value. Person 2 now pays tax on that property. So in effect Person 2 ends up paying far more tax than Person 1 on the same amount of income. :mad:
 
SkyDog58 said:
What I really hate about any sort of property tax is its absolute unfairness. Assume that two people both make the same income and pay the same income tax on that income. Person 1 then throws his take home income away on partying and other frivolous things. Person 2 uses a good portion of his take home pay to buy property whether it be a house, plane or something else that has lasting value. Person 2 now pays tax on that property. So in effect Person 2 ends up paying far more tax than Person 1 on the same amount of income. :mad:
Click to expand...

Let this be a lesson to you. Party like there is no tomorrow!:lol:
 
DJTorrente said:
Serious? How did that slip under the radar? New York used to have tax holiday weeks, usually around back-to school shopping time and limited to certain clothing. This was mostly to compete with NY and NJ who have no sales tax on clothing. I have heard nothing of a wholesale repeal of the sales & use tax.
Click to expand...

Yup

https://www.nbaa.org/news/pr/2015/20150401-035.php

Smart move for NY, a state that doesn't make smart moves often, if you don't make your state affordable to aviation, people will just take their business to another state.
 
Last edited:
Clark1961 said:
If it's on the value of the property then it is a property tax, not an ad valorem tax. Ad valorem taxes have a long history outside the US and are based on the increase in value of an item. Twisting the use of the name of the tax in the US is just typical political subterfuge.
Click to expand...

By the latin definition of ad valorem, it is "by the value" or "in proportion to the value". So it is the correct usage for this sort of tax (and synonymous with "property tax").

http://www.latin-dictionary.org/Ad_valorem

http://www.thefreedictionary.com/ad+valorem

"Ad" in Latin is not the same as "add" in English.

Many countries have "value added" taxes, which are collected as sales taxes. Different animal altogether.
 
DJTorrente said:
Thanks for the link. Looks like its stuck in committee? Good move if they do it.
Click to expand...


Old article, it went through according to my CPA. My googlefu is not strong the early in the AM, I'm sure you could find it.
 
Colorado has no ad valorem (property value) tax on personal aircraft either AFAIK. At least I've never heard of one and have never been assessed. The tax (registration, fee, whatever weasel word they want to use) on automobiles is ridiculously high, however.
 
You must log in or register to reply here.
Back
Top