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Article II

Applying Tax Codes – The Conservative Approach

How does the saying go? Two things in life are certain: death and taxes! I certainly am not going to discuss death, so the topic has to be taxes. Most people cringe at the thought of paying taxes, but in order for this state of ours to provide any kind of services, some amount of taxes have to be collected. However, that is where the tax code comes into play. Even though some amount of taxes is unfortunately necessary, it is the right of each and every taxpayer to reduce his/her taxes to the minimum amount allowable by law.

Tax laws and regulations are quite complex regardless of whether you are working within federal or state guidelines. At last count, Title 26 of the Code of Federal Regulations is somewhere north of 13,500 pages and the California Revenue and Taxation Code can be found printed on as few as 2,500 pages. Tax law was not printed for the light reader, which is why taxpayers turn to experts like us, at Aviation Tax Group, to guide them through a specialized portion of the California Tax Code.

If you have ever taken the time to read any particular portion of the tax code you will find that in most cases two people can interpret the same sections differently. California Sales and Use Tax Regulations are no different in this respect. This is why we always recommend the conservative approach when applying tax code; especially when you are proactively preparing for the purchase of an aircraft.

As with many tax experts, our interpretations of the tax code comes from our years of experience in filing tax returns, claiming exemptions and handling audits for our clients. From those experiences we have formulated an expanded set of guidelines that, when followed, ensures that our clients greatly exceed the minimum requirements of the tax code and guarantees them an exemption. Examples of our expanded guidelines might include increasing “more than half” in the tax code to more than 60% for application or increasing a “12 month period” to 13 months for added security.

Creating a margin for error is paramount when dealing with the tax code and claiming exemptions from tax. Considering the recent decline in revenue to the State of California, auditors are aggressively attacking any claims for exemption that are not significantly substantiated. If you want to ensure your hard earned money stays in your pocket, always use the conservative approach to interpreting tax code and make certain that your tax advisor is on the same page. Pushing the envelope can only cost you more in the end.

Aviation Tax Group is an aviation tax firm whose main goal is to assist aircraft purchasers and owners to legally minimize their taxes. We advise clients how to legally avoid California sales and use tax through the utilization of any one of the available exemptions. We provide quality and professional service through our knowledge and experience regarding sales and use tax on the purchase of aircraft.

If you are preparing to purchase or have purchased an aircraft and would like to find out how you can legally avoid the sales and use tax, contact Warren Alston or Julia Chan at 916-930-6141.