Aces High Bulletin Board
General Forums => The O' Club => Topic started by: LePaul on January 25, 2008, 01:47:02 AM
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If you stay for 20 days, they tax 5% of your aircraft's worth (http://www.aero-news.net/index.cfm?ContentBlockID=d79f4e50-10c0-4c92-8010-60194ad7070e&)
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They're out of their minds.
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The AP cites the example of Steve Kahn, who lives in Massachusetts. That state exempts aircraft purchases from its own sales tax to provide an incentive to support the industry.
Kahn often flies his plane to visit his vacation home in Rockland, Maine. He also serves as a pilot in the national Angel Flight program, picking up patients in rural Maine and bringing them to Boston-area hospitals free of charge. For his support of Maine's economy and service to its residents, Kahn was rewarded with a surprise, $26,000 tax bill on his airplane.
Meiners points out that a pilot could conceivably get a separate bill from every state visited on a cross-country flight. "What we have is a real potential for double taxation and triple taxation and endless taxation in the way the states try to enforce it."
Another example of the little guy getting the shaft. :eek: :furious
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This seems to follow the seriously misguided notion that anyone who owns and flies a light aircraft has money to burn :mad:
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Here they simply will not cut spending. They realize they have the highest income taxes in the nation (or close)...so now they feel obliged to shift the burden onto the tourists. Its just a mess.
The local economies are a mess. Most people leave the state in search of higher wages, as businesses are leaving in droves for other states that will be business friendly.
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That may well be the case, but I notice that it's not the only state that is trying out this ridiculous method of raising revenue.
I wonder if they'll have the balls to try taxing anyone who drives their car into the state with a similar tax? I'm sure many more cars of 2 years old and less spend just as much time in than aircraft.:t
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Did you notice where it said that there was an exemption for aircraft over 6,000#'s?
I guess if they tried to foister this on airlines' and other commercial aviation, This thing woulda went down in flames.
As it is now, looks' like there is going to be less traffic at Maine's fields' and terminals...Big business got another boon out of this, with the reduction in traffic(read:delays) they will be happy as pigs' in a poke.
I'd hoped that someday I could get a GA license,however it's lookin' kinda impossible, now...
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Oh yeah, it's pretty much aimed deliberately on those really dangerous light aircraft and their obviously excessively wealthy owners.
Everyone knows that terrorists would much rather smuggle in a few hundred pounds of explosives into a light aircraft and get someone who has spent thousands of dollars to get the skills to fly it to take it to their intended target and hopefully damage the exterior of it. It's much more efficient than scratching up a cheap $100 car, packing it with about a ton of explosive and finding some gullible lackey with no discernible skill to drive it into their target and obliterating it.
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Sounds more like a pay off by the big commercial airlines to squash any small business owners.
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I have a feeling they knew if they tried to land anything like this on larger commercial carriers they'd have had the money to see to through the court system. Then there would be no taxation laws, so they were sure to target those who would have more to loose by fighting it than just paying up or staying out.
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Insane.
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Indeed.
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That is screwed up.
Charon
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Intolerable..
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I know Steve personally as a SR-22 owner. We've got guys on the Cirrus owners organization making life difficult for Maine, especially with the exemption of 6000 lb gross weight and above - essentially making Biz Jets and turboprops worth 5 times what a normal light GA single or twin is exempt from the "use tax".
He has his plane registered in MASS which has no sales tax or use tax. He did angel flights into Maine - they looked at his tail # through Flight Aware and saw 20 days of activity inside and out of Maine. Basically COPA has said they won't be going to Maine ever - other owners groups are following suit, and FBO's are posting warnings to owners in states outside Maine cautioning them against flying into Maine.
Here is the latest update from Steve.
"The 5% was $17,500 and about $9,000 for interest, total about $26,500.
So here is the update -- I decided that I had created a stir with all the publicity, so I called the Governor's office and said I wanted to meet with him. The upshot was I got a meeting with his closest advisor (Sr. Political and Economic Advisor) - Jack Cashman. I put a presentation together and flew up to Augusta today. In the process, I was introduced to the Governor and had a substanitive meeting with Cashman. I don't want to get into all the details right now, but I think I found an advocate who is willing to help -- He has the Governor's ear and the ability to make things happen. He does think that Maine's enforcement of this statute is legally constitutional and would be upheld in court. But more importantly, he believes that the law is not fair and was not implemented in an honest way. He also feels that the economic benefits of this law don't come close to the overall costs- but has asked for more data to be sure. Finally, last but not least, he thinks the political and public relations problem is substantial and needs to be fixed quickly!! So, I promised that I would become equally active on the PR in a positive way if they corrected this for all of the pilots that are currently in appeal. (Unfortunately, it wouldn't affect Alan Sugar since he already paid.) So, I am not out of the woods, but I finally feel like I am making some positive progress. Will keep you posted!"
One letter gotten back from the Dep Gov went as follows.
Dear Ms. Helms:
Thank you for your recent e-mail to Governor Baldacci regarding the imposition of Maine’s use tax on aircraft. The Governor’s office has asked that I review your concerns and respond on his behalf.
Much of the contact we have received about this issue followed a story in the Aircraft Owners and Pilots Association (AOPA) newsletter and on the AOPA website about AOPA President Phil Boyer’s June 7, 2007 letter to Governor Baldacci. I responded on the Governor’s behalf by letter dated June 21, 2007, addressing the issues that Mr. Boyer had raised. Attached is a copy of that letter.
In the great majority of cases, there will be no tax consequences when an aircraft based in another state is used in Maine. And no Maine business that services aircraft should lose work because of the fact that the use tax does apply in certain situations. The law provides that an aircraft is not being “used” in Maine for tax purposes when it is here for "major alterations," "major repairs" or "preventive maintenance" as those terms are described in FAA Regulations (specifically, 14 Code of Federal Regulations, Appendix A to Part 43, as in effect on January 1, 2005). The federal definition of those terms is extremely broad.
Maine use tax is not even an issue unless an aircraft comes into Maine within the first 12 months after its purchase by a nonresident. And as noted in my letter to Mr. Boyer, even if the aircraft is present in Maine within the first 12 months for purposes other than repair and maintenance, no Maine use tax is due if sales or use tax of 5% or more was paid in another state. Finally, even if an aircraft is present in Maine within the first 12 months after its purchase by a nonresident, no use tax is due if the aircraft is here for no more than 20 days during the 12 months following its purchase.
We understand your concerns regarding this matter and appreciate your taking the time to contact Governor Baldacci.
Sincerely,
Domna Giatas
Deputy Commissioner
cc: Governor John E. Baldacci
Anyway... thought you should know that they are at least saying to my wife that you would not be taxed on the situation you described...
I still think their arguments are pretty weak and I hope it does cause them to lose revenue in the long run... short sighted politicians!
Another owners wife sent this off to the Dep Com.
------------------ And the response............---------------
"Dear Domna:
Your policy sounds so fair and reasonable after reading your letter. But I am still a little confused and was hoping just to clarify, that you would answer a few simple questions for me.
Is it true that you are effectively spying on pilots by seeking out FAA records and airport records of aircraft tiedowns going back at least five years or more?
Is it true that a non-resident could fly into the state just once, spend 3 weeks on vacation in Maine and be subject to your 5% Use tax?
Is it true that you have never posted any information about this secret tax at any general aviation airport in Maine?
Is it true that you are now actively going after pilots that flew into the state several years before this 20 day statute was even written?
Is it true that the statute about 20 days specifically says it is not retroactive before Jan 2005, yet you are still using it to go after pilots as far back as 2000?
Is it true that prior to 2005, pilots would have had no way to know that having their plane on the ground for 20 days in the state would trigger a huge tax? Is it also true, that despite the fact that they would have had no way to know that there could be a tax due, that you are still charging them interest at 12% a year retroactive to the year the flights were made?
Is it true that you are imposing this USE tax on general aviation pilots who were making Angel Flights into the state on purely humanitarian reasons?
Is it true that the original spirit of the USE tax was to ensure that Maine residents who purchased goods out of state and then brought them back into the state, could still be taxed, since they were effectively trying to game the system? Is it true that Maine Revenue Services is distorting the true legislative intent of these statutes to serve its own purposes?
Is it true that there is a specific statute that says there shall be no sales or use tax by a Non-resident who purchases an airplane and immediately transports it out of State? Is it true that Maine Revenue Services has decided to interpret that to mean ONLY if the plane was originally purchased in Maine? -- even though it doesn't say that and it would be illegal to only apply it to instate sales!
Is it true that the way Maine is interpreting these statutes is a flagrant violation of the Commerce Clause of the United States Constitution which forbids discrimination against interstate commerce?
Is it true that Maine Revenue Services sees this as an easy money-grab opportunity to generate $2 million a year and only upset a few rich pilots that can afford to pay anyway? !!!"
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I'm pretty sure, as per the Confederation to Constitution switch, no state has the right to tax things coming in from another state just for ****s and giggles.
However, since very few people have the money to post for a constitutional challenge, there is only ONE other option.
Take all of your aviation buddies, band together and boycott maine itself. It doesn't matter if your plane is a new one or not. Briefly set together a budget of all of the money you have spent in the past years in Maine (regardless of for what), and get all of your buddies to do the same.
Estimate how much money you threaten to cut off, send this to the governors office.
Then start to convince all of your non-aviation buddies to do the same thing.
Take up a small collection among buddies to put up a website describing what Maine is doing, further convincing OTHER people to boycott Maine. Describe what Maine is doing as "Confederate Practices, not seen since the Civil War." Without even batting an eye you've likened Maine to Slavery, and your cause grows stronger.
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Update today from Steve:
For those of you that have been following this absurd saga, I will briefly recap and then continue where I left off from the earlier thread.
In November and December I was able to generate a lot of negative press about Maine’s aggressive and unfair policy of taxing out of state pilots for simply flying into the State. The publicity included AeroNet News, AvWeb, AOPA and a widely distributed article by the Associated Press. Furthermore, the Portland Herald published an editorial a couple of weeks ago also reinforcing our position that the State’s use tax policy on non-resident pilots was inappropriate, and misguided.
The publicity was sufficient to mobilize Maine Revenue Services (MRS) to generate their own counter press releases and to publicly disclose (for the first time) their policy on taxing out of state aircraft. In late December, I was issued a final decision letter that my appeal had been formally denied and that I must pay up within 30 days or file in Superior Court (my deadline was Jan 25th, 2008).
In mid January, I met with Jack Cashman, the Sr. Economic and Political Advisor to the Governor. It was a good meeting and he actually listened to what I had to say and appeared interested to help. He agreed that what the state was doing was not fair, not smart economically and definitely a public relations disaster. So, after that, I was actually quite hopeful that the Governor would step in and force Maine Revenue Services to withdraw the letters for me and the other affected pilots. Last week, the AOPA also had a meeting with Cashman and a number of other state politicians reinforcing the message.
The deadline we imposed was yesterday – As a result, a summit meeting was convened that included Governor Baldacci, Jack Cashman, other cabinet members, Maine Revenue Services, the Attorney General’s Office, etc. From second hand conversations after the meeting this is what I learned: The meeting was quite contentious with MRS arguing that there are many people that don’t agree with their tax assessments and if the Governor steps in this time, he will be setting a terrible precedent. In the future, anyone who is not happy will think they can just go to the Governor and he will overrule his own taxing department. They argued that there is already a system in place for people who don’t agree with their assessments -- the Maine Superior/Supreme Court. The argument was also made that if the Governor helped us, it would become publicly known that the Governor intervened and there would be a backlash from people saying -- the Governor is willing to take care of rich people with airplanes, but not the rest of us – who also need tax relief.
So Governor Baldacci blinked first and caved in to Maine Revenue Services. Today we filed a petition in Superior Court and the litigation has begun. Now that we are in litigation I am prohibited from talking with anyone inside Maine government. Fortunately, the AOPA has become actively involved over the last couple of months. In fact, they have agreed to cover my initial litigation expenses. Their commitment and response has been really important and helpful at a critical time.
Steve Kahn N543DM SR-22 #363
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The mentality is probably as simple as if they can afford a plane they can afford another tax.
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I take offence to this part especially.
the Governor is willing to take care of rich people with airplanes,
In about 5 years I hope to be flying my own aircraft and I am far from rich.
Most folk I know who do own aircraft are far from rich, they have had to make extraordinary sacrifices to pursue their passion of flying. It a stereotypical bullchit attitude and it sucks.
It's akin to saying that anyone who owns their own home/business/sports car is rich.:furious
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That's awesome
This Governor is a moron (as your friend has learned). Some quick research will show that, as I mentioned previously, our Governor feels plucking higher fees and taxes from tourists is the answer. He is facing overwhelming pressure from taxpayers who, on average, earn less than the nation average yet pay the highest taxes.
I hope this goes all the way up to the Supreme Court, because I do not have much confidence in the legal process here.
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Originally posted by SD67
I take offence to this part especially.
In about 5 years I hope to be flying my own aircraft and I am far from rich.
Most folk I know who do own aircraft are far from rich, they have had to make extraordinary sacrifices to pursue their passion of flying. It a stereotypical bullchit attitude and it sucks.
It's akin to saying that anyone who owns their own home/business/sports car is rich.:furious
Its just the liberal mindset. If you have an airplane, in their eyes, obviously you are wealthy.
As for the cars...dont start! Before long, they'll devise a method to charge a higher toll on more expensive models!
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Well the government here in Oz has actually found a way to tax the RAIN so I wouldn't be surprised to see the greedy bastages jumping all over this one soon as well.
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At least here in Virginia they do it the old fashion way. Most of the State Reps are share holders in AEP (American Electric Power) and they voted to allow power companies the ability to charge as much as they wanted in the state. Since AEP has the monopoly on power, they charge insane rates on everything, and since they're the only power company, you're forced to pay or go without lights. Around here the average home (single family) gets a power bill of $150-250 a month. My power bill has increased by 300% in the last 5 years, yet I'm using LESS kWh than 5 years ago.
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What do you all spend the money on? Snowplows? I know that Kalifornia has tons of social welfare programs, but Maine never really struck me as a tax and spend state.
On a side note, I can't believe this doesn't fall under federal regulation of interstate commerce. Maybe carry a candy bar and sell it for $0.50 when you land.
Crazy crap.
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Originally posted by FiLtH
The mentality is probably as simple as if they can afford a plane they can afford another tax.
Isn't this a primarily socialist...er...democratic state? ;)
http://www-personal.umich.edu/~mejn/election/statemapredblue.png
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Originally posted by kamilyun
What do you all spend the money on? Snowplows? I know that Kalifornia has tons of social welfare programs, but Maine never really struck me as a tax and spend state.
On a side note, I can't believe this doesn't fall under federal regulation of interstate commerce. Maybe carry a candy bar and sell it for $0.50 when you land.
Crazy crap.
Well, we have a hand-out mentality here.
We also have the highest ratio of Medicaid users.
I mean, come on, Kalifornia is one thing, Im up here in the Northeastern Liberal Occupied Territories :)