California Sales and Use Tax
Aviation Tax Group works in the specialized area of California Sales and Use Tax Laws and Regulations. We provide quality and professional service through our knowledge and experience regarding sales and use tax on the purchase of aircraft, vessels and vehicles. With over 20 years of experience, we are dedicated to providing exemplary service to all of our clients. We believe in forging long term personal relationships with our clients and contacts throughout the aviation community.
The California State Board of Equalization (BoE) has a special department known as the Consumer Use Tax Section that focuses solely on the transactions of aircraft, vessels and vehicles. They are specialists who deal solely with this one small area of the law. In the current environment of California’s fiscal crisis, management at the BoE is putting an increased amount of emphasis on collections and enforcing compliance.
Our firm is dedicated to assisting taxpayers in legally avoiding sales and use tax by providing a service to our clients that assists them to support a claim for exemption. Being located in Sacramento, we maintain easy access to the BoE for all audits, conferences or Board hearings. We are so confident in the service we provide, that as a part of our consulting agreement, if you hire us prior to taking possession of your aircraft, vessel or vehicle, we guarantee you will LEGALLY avoid California sales and use tax on your purchase.
Sales and Use Tax in Other States
Although our expertise began with California, we have advised many clients on how they can legally minimize or even avoid sales and use tax in various states across the nation.
Before purchasing an aircraft, contact us about how you can legally minimize or avoid the taxes on your purchase.
Personal Use of Company Aircraft/Entertainment Disallowances
Personal use of the company aircraft was long viewed as a benefit available to wealthy private business owners and executives of large public companies. With increased security in the wake of September 11th and new lower priced and more efficient aircraft, more businesses have found advantages to operating corporate aircraft. As aircraft ownership has become more popular among businesses, the IRS and Congress have created a set of rules applicable when an employee has personal use of the company aircraft.
It has long been understood that personal use of company assets, such as apartments or automobiles, results in a taxable fringe benefit to the employee. Additionally, if a designee of the employee uses company assets for personal use, the employee is regarded as the recipient of the fringe benefit.
Two methods are available for valuing personal use of the company aircraft. Employers may use the Fair Market Value (FMV) method to determine the value of personal flights. This method requires determining the charter rate for a similar aircraft for a similar flight plan in an arm’s-length transaction. The second method available for valuing personal use of the company aircraft is known as the Standard Industry Fair Level (SIFL) formula. This method typically results in a lower imputed income to the employee.
Aviation Tax Group assist its clients in these complex calculations and determining which method is best utilized.