Van’s Sales Tax

Did a search on the forums and couldn’t find an answer so I figured I’d throw it out there... are kits, engines, props etc still subject to sales tax if you drive into Oregon from outta state to pick up the items? Asking for a friend.

Oregon doesn't have sales tax. So from that few point 'your friend' is good.


But 'your friend's' state will probably want you to pay a USE tax (equivalent of sales tax)

Burndout11 said:

Did a search on the forums and couldn’t find an answer so I figured I’d throw it out there... are kits, engines, props etc still subject to sales tax if you drive into Oregon from outta state to pick up the items? Asking for a friend.

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CA will require proof of tax paid when your A/C shows' up in their records.

Tax attorney

Ask your tax attorney, that’s probably a safe place to start. Also origins of said kit, if you got it at a garage sale for. 500$ how can the taxstapho argue the price, like buying a car private party for price A, but on the paper work price B is official... tax evasion.. illegal... tax avoidance ... legal..

States vary. So, for example, in NY (and similar states) in the case where I drive another state to buy something, I avoid sales tax. But, there is also a use tax that (simplistically) mirrors the sales tax so I'd have the identical liability. In most states the tax guys are very aware of aircraft and in the case of an experimental a trigger would be the registration of the aircraft.

Burndout11 said:

Did a search on the forums and couldn’t find an answer so I figured I’d throw it out there... are kits, engines, props etc still subject to sales tax if you drive into Oregon from outta state to pick up the items? Asking for a friend.

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If you build it in Oregon, I would say no tax. If you build it in CA, I'd say, from an audit point of view, the sales tax is owed.

Be thankful you're in Kern county, CA at 7.5% and not Los Angeles county at 9.5%.

NinerBikes said:

If you build it in Oregon, I would say no tax. If you build it in CA, I'd say, from an audit point of view, the sales tax is owed.

Be thankful you're in Kern county, CA at 7.5% and not Los Angeles county at 9.5%.

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Unfortunately I’m in the city limits so it’s actually 8.25. Hurts a bit more

As I understand CA rules, when you first register the plane in CA, you have to pay the difference between the use tax rate and what you can prove you've already paid in sales tax. So if CA says you owe 8.25% and your plane is valued at 100k, you would owe $8,250. If you saved the receipts from Van's that shows you paid $2k in tax on the kits, and another $2k in tax on the motor, then you only owe CA $4,250. CA use tax is paid in arrears as well, so you don't technically owe anything until the year after you register the airplane. Register it Jan 1 2021, don't pay til 2022. Register it December 31, 2021 you still pay in 2022.

Burndout11 said:

Unfortunately I’m in the city limits so it’s actually 8.25. Hurts a bit more

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What airport are you planning to be based at?

If the airport is in Kern county only (not in Bakersfield) and the plane is going to be based there, you might be able to get away with the 7.25%.