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Tax issues a concern in CaliforniaTax issues a concern in California

Aircraft purchasers in California would be liable for a sales tax over a longer period of time if a bill introduced in the assembly is enacted into law. Although the bill is not out of committee, AOPA has contacted the Revenue and Taxation chairperson in an effort to stall its progress before it moves through the legislative process.

The bill affects the sales tax on vehicles and vessels as well as aircraft. While it does not increase the tax rate, it expands its application from 90 days to one year for a vehicle purchased by a California resident outside the state and then brought in. This means the tax applies, even if the aircraft has been based out of California for as long as a year. Presently the tax applies only if the aircraft is brought into the state within 90 days from the date of purchase.

In a letter, AOPA Senior Vice President of Government and Technical Affairs Andy Cebula said, "Tax laws vary greatly from state to state; however, in AOPA's nationwide experiences, the provisions of AB 694 are unusually restrictive for aircraft purchased outside the state."

He says AOPA is concerned because the sales and use tax rate in California commonly ranges between 7.25 percent to 8.25 percent, depending on the local tax rate, meaning the financial impact of this change on individuals looking to purchase an aircraft is substantial. The association has asked the assembly to reconsider AB 694 and preserve the present 90-day presumption.

AOPA regional representatives are working many aviation financing and tax issues nationwide. For an update on these and many other issues of interest, see AOPA's regional representative reports.


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