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Rhode Island clarifies tax lawRhode Island clarifies tax law

Pressure from AOPA and individual pilots has prompted Rhode Island's Division of Taxation to issue a clarification of its use tax law.

In a letter to AOPA Senior Vice President of Government and Technical Affairs Andy Cebula, Assistant Tax Administrator Robert Geruso said the emergency tax regulation was never intended to apply to out-of-state pilots.

"The regulation does not apply to non-commercial aircraft purchased by the user while a nonresident of this state and used outside this state while a nonresident and thereafter brought into this state for his/her/its own use," he wrote.

Rhode Island has a seven-percent use tax law. If applied to an out-of-state pilot, it would mean that an aircraft owner flying a 1983 Cessna 172P valued at $61,000 would owe $4,270 if he stayed overnight at a R.I. airport, landed and took off from a R.I. airport three times within one month, or flew between two or more R.I. airports.

In a telephone conversation with AOPA Manager of State Affairs Keith Holt, Geruso explained that the emergency regulation was actually intended to help Rhode Island residents who purchased aircraft outside the state and hangar them beyond state borders. The old regulation hit them with the use tax the first time they brought their aircraft into the state. The new regulation offers them more flexibility.

Geruso admitted that the regulation as written is not clear, and that the interpretation made by AOPA and other aviation groups is understandable.

In his letter, Geruso assured AOPA, "When this regulation is officially promulgated in October 2003, this language will be reflected in the regulation."

Said AOPA's Holt, "The state of Rhode Island learned today that pilots are definitely a group that will protect their interests."


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