AERO&MARINE TAX PROFESSIONALS:
Clients save money by turning to specialist firms such as AERO&MARINE Tax Professionals who routinely obtain referrals from attorneys and accountants for the specific purpose of walking a client through the maze of obtaining an exemption from California sales and use taxes for their aircraft purchases.
“Before companies like us came along, most money professionals only had the time to print copies of the regulations, send them to their client with some instructions, and then wish them good luck,” acknowledges Alston. “Rightfully so, their time is too valuable to do any follow up. On the other hand, specializing in avoiding California sales and use tax on aircraft, vehicles and vessels is all we do.”
“Part of our success stems from researching decades of decisions and recommendations by the California Board of Equalization (BOE),” explains Alston. “These are like a legal brief of every case that went before one of the hearing officers. What you get is the BOE’s entire case laid out with evidence, and their decision, along with the ‘why’ of it. We just made a checklist of all the failure points, and we apply 100% of the points to every one of our customers. As a result, there isn’t any way for them to fail to win their exemption.”
As an example, Alston explained how, in some cases, the BOE required that a purchaser leave a plane outside of the state for more than 90 days before it enters the first time. But Alston raised the bar to 120 days on that test for strategic reasons. It strengthens the owner’s case because merely accepting delivery in another state and parking it in a hangar for a few months seldom insures a situation where the transaction will be held as non-taxable.
Alston’s company also immerses itself in the follow-up process, constantly maintaining two-way communication with the client to ensure compliance on all counts.
“We gather information on an interactive basis and perform all of the documentation in real time,” explains Alston. “In this manner, we make sure the client is complying with all the steps, and it also avoids any misunderstandings. We prepare a tax return, run it through a couple sets of internal reviews, and the submission to the BOE.”
The same methodical practices are also required when obtaining exemptions for common carrier clients, an especially important service since most air carrier executives and flight department managers initially rely upon the false belief that “Part 135″ will obviate the need to deal with the California BOE.
According to Alston, while Part 135 is referenced in federal regulations, it is not mentioned in the California code. Instead, California Regulations 6366 and 6366.1 pertain to aircraft sold or leased to common carriers. These sections do offer legal exemptions. However, the law requires the longest test period (12 months), during which time extremely detailed documentation must be maintained: log books, flight plans, weight and moment sheets, customer revenue billings, a complete copy of engine maintenance logs showing total hours since date of purchase, and more. Every single flight is examined, and one mistake can trigger the entire tax. It takes precise guidance from an expert to guarantee compliance and avoid the sales tax.
WE DEAL WITH THE “BOE” FOR YOU
Of all the services that specialists such as AERO&MARINE Tax Professionals provide, the most appreciated by clients, and those that refer them, is the fact that these specialists insert themselves between the client and the BOE staff.
“They don’t ever have to talk to the auditors,” assures Alston. “Once we get a letter of authorization, then the board has to talk to us. When you understand how the word ‘tax audit’ affects the spine of most human beings, this helps a lot.”
The whole process culminates with receipt by the client, of a letter from the BOE stating that the exemption on the aircraft tax has been supported-a common result for the group at AERO&MARINE Tax Professionals.
“What makes us unique is that we guarantee the service,” says Alston. “As long as the client engages us before possession of the mobile transportation equipment, and then explicitly follows our instructions, they get a written guarantee that they will legally avoid California sales and use tax on their aircraft sale, or our entire service is gratis. We’ve never had to pay anyone back, though, because we’ve won every case.”