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One thing that I have found, that may be specific to Colorado, but may be similar in other states is this. In CO, they assess taxes on aircraft sales based upon new registrations with the FAA. Whenever I register a new balloon, about six months later, I get a bill from my state dept. of revenue. As they are looking at N number registrations, this is only triggered by registration of an envelope (as lower ends and components don’t have N numbers). I can buy and sell all of the lower ends I want, and not be taxed. But, register an envelope, even a dead envelope, and I get a tax bill. They base the taxes on the sales price (and they won’t take a FAA bill of sale form as proof of sales price for some reason). So, any time I buy a system, I treat the envelope as a separate transaction from the lower end. With older systems, most of the value is in the lower end. As such, I assign the majority of the sales price to the lower end, with a smaller value placed upon the envelope, thus reducing the tax liability.
And, BTW, if I am unable to prove the purchase price with a separate bill of sale form from the FAA Bill of Sale, they will base the taxes upon the new price of the balloon…ouch!
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