Tag: use tax

Updated Florida Form to Report Sales and Use tax on Aircraft

Florida Introduces New Form to Report Sales and Use Tax on Aircraft

The Florida Department of Revenue (FL DOR) has updated its reporting form on the sale and use of aircraft in Florida. Form DR-15AIR (Sales and Use Tax Return for Aircraft) replaces Form DR-42A (Ownership Declaration and Sales and Use Tax Report on Aircraft). The new form provides explicit guidance on when to report taxes on the sale and use of aircraft in Florida.

When Form DR-15AIR Should be Used.

An individual should report sales and use tax on the purchase of aircraft when they don’t pay Florida’s sales tax to the seller. Form DR-15AIR clarifies the three (3) situations when an individual should instead pay a 6% “use” tax:

1.  An individual purchases an aircraft from a person who is not a registered aircraft dealer and the sale or delivery of the aircraft occurs in Florida;

2.  An individual purchases an aircraft in another state, territory of the United States, or District of Columbia and is brought into Florida within six months of the purchase date; or

3.  An individual purchases an aircraft in a foreign country and is brought into Florida at any time.

This use tax is in addition to any county discretionary sales surtax. The discretionary sales tax applies to the first $5,000 of the purchase price and rates vary by county.

When Sales and Use Tax is Due.

Florida Sales and Use Tax
. Taxes Not Included

Florida’s use tax is technically due when an individual brings an aircraft into Florida for use or storage. The corresponding tax returns and tax payments, however, are due only on the 1st day of the month after the actual month when:

1.  The airaft was purchased in Florida;

2.  The aircraft was delivered to a Florida location; or

3.  The aircraft enters Florida for use or storage.

The tax returns and tax payments are late if coming after the 20th in the month they are due. Late returns and payments are penalized a minimum of $50 or 10% of the amount due, whichever is less. Interest is dues on late payments as well.

Exceptions to Sales and Use Tax.

Exceptions to Florida’s sales and use tax on aircraft continue to apply, including:

1.  The value of an aircraft, boat, mobile home, or motor vehicle an individual trades in reduces the taxable purchase amount. The person accepting the trade in and selling the aircraft must be the same.

2.  An individual removes an aircraft purchased in Florida from the state within 10 days after the date of purchase, or 20 days after completion of repairs or alterations.

3.  A credit for taxes pad in another state, territory of the U.S., or Washington D.C. No credit is available for taxes paid in another country.

4.  An exemption from the tax for non-residents of Florida when their aircraft enter and remain in Florida for 20 days or less during the six-month period after aircraft purchase. This exemption also applies to non-resident owned aircraft that enter Florida for the purposes of flight training, repairs, alterations, refitting, or modification.

Ari Good, JD LLM, a tax, aviation and entertainment lawyer, is the Shareholder of Good Attorneys At Law, P.A. He graduated from the DePaul University College of Law in 1997 and received his LL.M. in Taxation from the University of Florida.

Contact us toll free at (877) 771-1131 or by email to info@goodattorneysatlaw.com.

IRS Takes Aim At Professionals

The IRS maintains “Audit Technique Guides” for use by its examiners in auditing different types of businesses. These guides identify the issues that the auditor should be reviewing and the types of documentation the auditor should review in addressing these issues.

The taxpayer can use these Guides to his advantage in several ways. Naturally it is always helpful to have your opponent’s playbook before the game. While an auditor might not be bound strictly to the principles in the Guide (it is advisory rather than mandatory), you can point to its guidelines if there are points of disagreement as to what the auditor wants to review or the scope of the audit. Always remember, too, to verify that the years to be examined are not closed (generally tax years more than 3 years absent fraud and with timely filed returns). You can similarly point to the Internal Revenue Manual (I.R.M.) as “persuasive” authority that you are correct on a particular point of tax law.

With that background, the Service has recently updated its guides for audits of Attorneys and Business Consultants. One particular area of interest is in the Attorney guide on the subject of attorney-client privilege. The guide correctly recognizes that an attorney and his or her client have the right to assert this privilege against the IRS. The Service may be able to overcome this privilege in some cases by issuing a summons, if there is evidence of fraud or in criminal matters. The tax attorney must carefully review the information to be produced, however, consistent with his or her ethical obligations to his clients, and insist that the Service strictly adhere to its procedures for issuing summons to acquire protected communications. The Service may not audit an attorney as a fishing expedition for information about the attorney’s clients.

As a tax attorney I often represent other professionals against the IRS and Florida Department of Revenue in federal income tax, and Florida sales tax, use tax and employment tax audits. If you would like more information about defending your legal rights in this area please visit me at https://www.goodattorneysatlaw.com/tax.html.

For the IRS Attorney Audit Technique Guide see http://www.irs.gov/businesses/small/article/0,,id=241098,00.html