Huh? 
I thought this might be a tax on Main residents who bought aircraft out of state. But the article says the aircraft are owned and based outside of Maine, and the implication seems to be that non-residents are being charged taxes on aircraft they didn’t buy in Maine. Could it be that aircraft owners who move to Maine are being taxed on their pre-move purchases? But the first paragraph mentions flying to Maine for ‘getaways’; the implication being that they’re just visiting.
What gives?
It might have something to do with the amount of time spent in Maine.
Here’s a link from the Maine Revenue Services: http://www.maine.gov/revenue/salesuse/GIB96.pdf
The important part is at the bottom of page 2. Warning, PDF.
Maine is notorious for having high tax rates and the will to get every penny coming to them and then some. The new aircraft tax law passed in 2005 but it didn’t come into effect until January 1, 2007. I believe Florida has a similar tax. Basically, the tax applies to you if you keep a new plane in the state for at least 20 days out of the first year you own it. Certain commerical type planes are exempt. Time spent in the state for maintenence and repair doesn’t count toward the 20 days. Supposedly, the change is designed to catch people who really live in Maine but who illegally claim residency in another state for tax purposes (neighboring New Hampshire, for example, which has no general sales tax or general income tax.) A similar tax applies to boats. In practice, these taxes catch a lot of people who take extended vacations in what we used to call without irony “Vacationland” and now call “Taxationland.”
Whether the tax will eventually pass muster with the state and federal courts, I couldn’t say.
From Baffle’s link:
So this only applies to residents of Maine (‘Maine taxpayers’)? That is, a Maine resident purchases an aircraft in a state that does not have sales tax. He bases the aircraft in the other state. He cannot use the aircraft within Maine for more than 20 days during the 12 months after its purchase unless he pays the 5% tax. But this does not affect people who may spend more than 20 days flying in Maine if they are residents of another state, right? What about if someone moves to Maine within 12 months of buying an aircraft?
That’s not how I had understood it, but apparently that’s true. Of course I could be wrong (again). Below are the relevant parts of the text of the statute as it now stands:
*this exemption is for “aircraft that weigh over 6,000 pounds, that are propelled by one or more turbine engines or that are in use by a Federal Aviation Administration classified 135 operator.”
A few decades ago, California put an additional registration fee on cars that were bought out of the state but brought in and then registered in California. Around eight or ten years ago, there was a court case that ruled that those additional fees were an unconstitutional infringement the Fed’s responsibility to regulate on interstate commerce. I got a refund of about $300 plus interest on the one car I brought into California.
I say this because I wonder if a similar claim can be made against this aircraft tax. However, even after reading the law bibliophage cited, I’m not 100% sure I understand it.
Ok, here is how I interpret the statute in question:
If you have to register property in Maine, Maine is going to collect a sales tax at the time of registration. However, if you purchase the property outside of the state, and you register it outside the state for more than 12 months, or can present documentation of use of the property outside the state for more than 12 months, you are exempt from payment of the sales tax. This exemption does not apply to certain types of property, notably automobiles, watercraft, ATVs, snowmobiles and aircraft.
As to aircraft, they will be charged sales tax, unless the purchaser was a non-resident at the time of purchase, AND the aircraft was not in the state of Maine for more than 20 days (excluding time spent on repairs) during the 12 months following purchase. Of course, aircraft purchased by a non-resident are not charged sales tax. So, we must assume that the only aircraft that ARE charged sales tax fit one of two categories:
a) A resident purchases and then registers the aircraft, or
b) A current resident registers an aircraft which he/she *purchased outside of Maine * while not a legal resident of Maine, but then brings said aircraft into the state for more than 20 days during the twelve months following purchase.
Aircraft sold in Maine to non-residents are not charged sales tax.
Aircraft sold outside of Maine to residents who then register the aircraft in Maine are charged sales tax.
Presumably, though it does not say so explicitly, if you keep and register your aircraft outside of Maine for more than 12 months, and don’t exceed the 20 days during that 12 months, you won’t get charge sales tax if you then register the craft in Maine.
We assume that non-residents don’t have to register aircraft in Maine; usually registration laws apply to those resident in the state.
Aircraft are registered federally, not by states. Enforcement is by looking at aircraft on the ground or by listening to ATC calls. Some pilots I know who fly up there regularly have taken to maintaining radio silence just to be sure - and that is an obvious safety issue.
It sure seems explicit to me. :shrug: Whatever.
This reg presumes Maine residency for someone spending only 20 days out of 365 there. Just silly. And it’s the *eased * version now.
Um, in what way does the statute (not regulation) presume anything about residency? If the state’s Revenue Service has formulated a regulation interpreting the statute, and that’s what you are referencing, it would help if that was provided (the link to the position of the MRS neither cites a new regulation, nor supports the assertion of the AOPA as to what is happening). The statute isn’t presuming anything about your residency status, it makes quite clear in subsection 27 that aircraft purchased by non-residents are not subject to taxation. Thus, reading subsection 45 in harmony can only mean that the aircraft subject to the use tax are those which are purchased by residents, or which are purchased by people who were non-resident at the time of purchase, and become resident thereafter, having had the aircraft in Maine for more than 20 days in the first 12 months of ownership.
Since, as you note, aircraft aren’t registered by the state, then Maine has to follow up on this aggressively using whatever other means they can to determine who might be subject to the sales tax/use tax in question. I note from this website that California faces similar difficulties, though the legislature there hasn’t perhaps gone to quite the extent Maine’s did in trying to determine who should be subjected to the tax. If the Maine Revenue Service is attempting to bill people who aren’t truly subject to the tax, solely to try and catch all who really are subject to the tax, that’s a different kettle of fish, but nothing I’ve read so far indicates that anyone who flies into Maine and keeps the aircraft there for 21+ days is getting billed, even absent some other indication of Maine residency.
That’s “residency” as it establishes taxability of possessions, friend. In Maine’s defense, though, it has a high (I believe highest of all states) percentage of nonresident property owners (hence the “Vacationland” license plates). There’s a higher-than-average chance that a regular visitor also owns a second home there, a big step towards establishing residency.
There’s also an unfortunate (and false) presumption that anyone who can afford an airplane can afford to shell out a bit more to be able to use it. Who better to go after for money than people with a lot of money who can’t vote against you?
Upon further review, that first link is in the OP itself. Sorry, Johnny.
Ok, now, this gets to the meat of the point. What Maine is saying is that people who are regular residents of their state, usually for vacation purposes, are going to be treated as if they reside in the state, sufficient to establish the entitlement to be taxed on their possessions purchased. You’ll note that the person in the story has a summer home in Maine, and purportedly lives in Boston. I think that you might find that someone who simply ends up, for whatever reason, visiting the state without having some other indication of residency, isn’t getting billed. I could be mistaken, but I’ve seen nothing to indicate otherwise.
I tend to think it’s a bit of a heavy-handed approach to the concept of people using subterfuge to avoid taxation, however. 21 days isn’t that much.
EDIT: Small .pdf file.