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Avoiding Sales Tax on High-End Purchases: Airplanes, Boats, Yachts, Vehicles, Jewelry, Racehorses, Other Purchases

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, August 11, 2022

Recorded event now available

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This course will highlight options to eliminate or lessen state sales taxes on high-dollar purchases. Sales and use taxes on expensive items can significantly increase the purchase price. Our sales and use tax experts will discuss strategies to abate these taxes for purchases of planes, yachts, vehicles, and other costly acquisitions.

Description

With state sales tax rates from 0-7.25 percent, not including additional municipal or jurisdictional taxes, sales taxes on high-end purchases can be astonishing. The obvious way to avoid sales tax would be to purchase in one of five no sales tax states: Alaska, Delaware, Montana, New Hampshire, or Oregon. Purchasers may have to contend with municipal or jurisdictional taxes even in these states.

Purchasing an item in a no or low tax state is not enough to circumvent sales taxes; most states charge use taxes on items brought in or used within the state. These use taxes come without statutory time restrictions and can be assessed indefinitely.

States do offer specific exemptions from sales tax on qualifying purchases. For example, Florida and New York are two states that provide exemptions for watercraft purchases by nonresidents if the boat is removed within a specific time frame and used in another state. Similarly, many states offer fly-away exemptions for airplane purchases. These exemptions require the removal of the aircraft from the state within a specific time to qualify for the exemption.

Several states do not need fly-away exemptions because they do not tax aircraft purchases. Among these states are New York, Delaware, and Oregon. Recently, a bill has been introduced in Florida eliminating their sales and use taxes on airplane purchases. Florida now has a 10-day fly-away exemption. Staying abreast of multiple states and jurisdictional sales tax requirements is challenging. However, the tax savings on high-ticket purchases are worth the pain.

Listen as our knowledgeable panel guides you through strategies to lower state sales tax on expensive assets.

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Outline

  1. Sales tax on high-end purchases: introduction
  2. No-tax and low-tax states
  3. Exemptions
  4. Use tax
  5. Property taxes
  6. Specific items
    1. Airplanes
    2. Boats and yachts
    3. Vehicles
    4. Jewelry
    5. Racehorses
    6. Other
  7. Cases and rulings
  8. Managing audits

Benefits

The panel will review these and other critical issues:

  • States offering fly-away exemptions for aircraft purchases and state-specific qualifications
  • Methods to lower sales and use taxes paid on airplane and boat purchases in California
  • How to lower sales tax on vehicle purchases
  • Common exemptions available for sales tax relief in states
  • Planning considerations for the purchase and/or importation of artwork

Faculty

Alston, Thomas
Thomas A. Alston
President and CEO
Aero & Marine Tax Professionals

As a California Sales & Use Tax Expert, Mr. Alston specializes in helping his clients avoid sales & use tax...  |  Read More

Lawrence, Joshua
Joshua K. Lawrence
Partner
Hodgson Russ

Mr. Lawrence concentrates his practice on state and local taxation, focusing on New York State and New York City tax...  |  Read More

Slavin, Sean
Sean Slavin, CPA
Tax Consultant
Assessment Counselling Services

Mr. Slavin worked in public accounting for several years, servicing both high net worth individuals and...  |  Read More

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