April 22, 2008
By Alyssa J. Miller
You could get slapped with a steep tax bill if you fly into Maine within the first year after buying your aircraft. The Maine legislature gutted a bill that AOPA had helped develop to exempt out-of-state aircraft owners from the 6 percent use tax.
The last-minute change to the bill exempts charity and compassion flights from the 20-day limit a new aircraft can be in Maine without being taxed, but it does not exempt an aircraft’s time spent in the state because of poor weather or business or pleasure trips. Time spent in the state for maintenance is already exempt.
“This bill doesn’t address the tax issue at all,” said Greg Pecoraro, AOPA vice president of regional affairs. “We’ve told the legislature that they won’t be able to get much revenue from the use tax because new aircraft owners won’t fly into the state.”
Aircraft owners who did not have to pay sales tax when they purchased their aircraft would be subject to paying 6 percent of the aircraft’s sale price. Those who paid a sales tax less than 6 percent would be charged the difference.
AOPA had worked with the Maine aviation business community to persuade the governor’s office and the legislature to develop a solution. The bill, which was AOPA’s most promising option, was stripped because the Appropriations Committee wanted the funding from these taxes to address the projection that next year’s structural gap would be about half a billion dollars.
While a few weekend trips to Maine might not hurt, pilots should be wary.
“There is a gray area. It is possible that if you fly to Maine on a Friday evening after work and stay until early Monday morning before flying back to the office, that stay could count as four days of the time limit,” Pecoraro explained. “Or, lets say your aircraft gets weathered in during your weekend trip, but because of work obligations, you have to leave your airplane and drive or catch a train home. The clock is ticking the whole time the aircraft is stuck in the state.”
Pilots are encouraged to read the Maine Revenue Service’s explanation of the use tax before flying into the state.
April 22, 2008
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