I was searching some old topics in the forum, and came across the FAA Registry Site. I noticed out of curiosity that a large number of Cirrus airplanes are registered in Delaware. Is there still a pretty good tax advantage in registering one’s airplane in this state? What are the pros and cons?
Did you check to see if some of these were owned by Cirrus Design?
I was searching some old topics in the forum, and came across the FAA Registry Site. I noticed out of curiosity that a large number of Cirrus airplanes are registered in Delaware. Is there still a pretty good tax advantage in registering one’s airplane in this state? What are the pros and cons?
Re perceived sales/use tax advantages, don’t get your hopes up. If, for example, you live in California, buy an aircraft and choose to register your aircraft in Delaware, and if you base (meaning physically locate it there) your aircraft in California, the California sales/use tax collector will want his full percentage of tax on your purchase/use of the aircraft based in California. Same is true in all other states.
Since the bucks involved are large ($100,000 at 5% = $5,000 tax), many states have specific programs to check aircraft “N Numbers” at their local airports, and to compare what they find with their tax records. In a full sunshine atmosphere, there ain’t no free lunch regardless of how or where you choose to register the aircraft.
And if they conclude that you’ve been engaged in a conscious effort to defraud the state, life can get very difficult and very expensive very fast.
Pete
I was searching some old topics in the forum, and came across the FAA Registry Site. I noticed out of curiosity that a large number of Cirrus airplanes are registered in Delaware. Is there still a pretty good tax advantage in registering one’s airplane in this state? What are the pros and cons?
I have a plane in a Delaware corporation.
As has been posted it doesn’t relieve you of sales tax nor can I find any other advantage over a corporation in my home state.
There are disadvantages. My home state charges $325 more per year to maintain a “foreign” corporation than a domestic one. Also I have paper work to send to 2 states annually instead of just one.
Taking delivery of a new plane in September and forming a new domestic corp for that. It’s simpler and a little better, at least in my circumstances.
I was searching some old topics in the forum, and came across the FAA Registry Site. I noticed out of curiosity that a large number of Cirrus airplanes are registered in Delaware
You will probably find that many of those are based in Europe, but maintained on the N-register via a trustee arrangement.
Shouldn’t you be able to form a Delaware corporation and lease the plane to a business in another state. If that state has sales/use tax then you I beleive that you would pay the use tax associated with the % of use during the time the plane is based in that state. If the plane is based in a state that has a sales/use taxe for 5 years and then moved to a state that doesn’t have on that that use tax portion of the lease would drop off.
I am told that this is a viable approach to managing your use tax.
Does anyone have any feedback - pro or con?
Regards,
AJ
Re perceived sales/use tax advantages, don’t get your hopes up. If, for example, you live in California, buy an aircraft and choose to register your aircraft in Delaware, and if you base (meaning physically locate it there) your aircraft in California, the California sales/use tax collector will want his full percentage of tax on your purchase/use of the aircraft based in California. Same is true in all other states.
Since the bucks involved are large ($100,000 at 5% = $5,000 tax), many states have specific programs to check aircraft “N Numbers” at their local airports, and to compare what they find with their tax records. In a full sunshine atmosphere, there ain’t no free lunch regardless of how or where you choose to register the aircraft.
And if they conclude that you’ve been engaged in a conscious effort to defraud the state, life can get very difficult and very expensive very fast.
Pete
I was searching some old topics in the forum, and came across the FAA Registry Site. I noticed out of curiosity that a large number of Cirrus airplanes are registered in Delaware. Is there still a pretty good tax advantage in registering one’s airplane in this state? What are the pros and cons?