Florida officials try to clarify confusing tax law

March 28, 2008

Florida officials try to clarify confusing tax law

By AOPA ePublishing staff

One of general aviation’s most friendly states has been looking decidedly less so for people who recently purchased aircraft. They are worried about getting hit with unexpected tax bills from Florida.

With the Sun ’n Fun Fly-In in Lakeland, Fla., just around the corner, confused members have been contacting AOPA. The association on March 28 received written clarification from the state in a response to a recent letter from AOPA President Phil Boyer to Florida Gov. Charlie Crist. Some pilots have even been threatening to boycott Sun ’n Fun over the issue.

“Generally, please know that the focus of the Florida Department of Revenue’s use tax enforcement activities is on the aircraft with a significant connection to Florida, not nonresidents with no Florida connection only here on a temporary basis, and we will not be at Sun ’n Fun; we do not use ‘fly-ins’ as enforcement activities,” said George Hamm, the Department of Revenue’s chief assistant general counsel.

Presumably, if a nonresident buys an airplane in Florida and moves the aircraft out of the state within 10 days, the owner would not be subject to use tax. The catch is that the aircraft cannot return in the first six months of ownership. There is, however, a window that allows 20 days for repair work.

The six-month time period can also kick in for a nonresident who buys an airplane in another state. If the airplane is brought into Florida for repair, training, or business use within six months of purchase, a use tax (currently at 6 percent) may be due.

AOPA is most concerned about the word “may,” which applies to both scenarios. There is also some muddiness as to what constitutes a connection to Florida and many other gray areas.

While the Department of Revenue says it’s trying to be fair, the confusing law is still in place. AOPA is working with the state to come up with a solution. Legislation is currently pending that would provide aircraft with “safe harbor” treatment for limited use in Florida, similar to what is reserved for boats.

“The law is complex, and AOPA wants members to be careful so they don’t get a surprise tax bill,” said Boyer.

AOPA will be at Sun ’n Fun all week, from April 8 through 13. AOPA Day is on Friday, April 11.

March 28, 2008