Maine's high court clarifies tax rules for pilots
April 30, 2011
When does an airplane-owning resident of another state have to pay sales tax on that aircraft to the Maine Revenue Service?
On April 26, the Maine Supreme Judicial Court clarified the state's rules surrounding that question and, in the process, vacated the ruling of a lower Maine court that said that Steve Kahn, a pilot from Massachusetts, had to pay $26,000 in sales tax to Maine.[1]
Kahn said of the high court's ruling, "It's a big relief and a huge vindication. It's been 4 long years. I am only sorry that it wasn't a more decisive victory for the general aviation community. The court has left the door open to interpretation about how many days one can fly into the state before it becomes ‘sufficiently substantial’ from a taxing perspective."
The court ruled that a state law which said that if an aircraft is on the ground in Maine 'more than a de minimus level' should be charged the sales tax in Maine if the "owner had not paid equivalent sales tax to another state" and the aircraft "was not purchased and used for more than 12 months before it became physically present in Maine."[1]
The decision from the Maine Supreme Judicial Court said "The Legislature cannot have intended, for instance, to impose a use tax on any aircraft that landed in Maine briefly for refueling or a single, short visit. Such taxation would be inconsistent with the purpose of a use tax to serve as a complement to the sales tax."
Kahn had paid the tax, and will now be presented with a refund. He thinks Maine will be better off with the understanding of the tax law now provided by the state's high court: "A state that promotes itself as the Vacationland, should be doing everything to welcome visitors whether they arrive by car, boat, commercial plane, general aviation, etc. And you would think a longer stay would be a good thing, not a bad thing."[1]
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