The problem--a sales tax dispute over the asset had
resulted in a government lien, making a sale impossible.
GE Commercial Finance provides flexible financing solutions that enable companies to acquire a wide range of assets like corporate aircraft and marine vessels.
When GE comes into possession of these assets, they often offer the equipment to customers for sale or lease. When a $20 million G4 Gulfstream jet became GE's asset as a result of an unpaid loan, they wanted to make this asset available to their customer base.
"This Gulfstream was a particularly valuable asset and we wanted our customers to be able to acquire it through sale or lease," says Anthony Devito, Senior Transaction Manager, GE Commercial Finance, Commercial Equipment Financing. "The challenge was that numerous financial, taxation and legal issues prevented us from doing so.
"The California Board of Equalization had already placed a lien on the jet. We needed a sales tax exemption to be able to lift the lien before anything else could be taken care of."
Continues Devito, "We're very familiar with the law regarding sales tax filing requirements, particularly as it related to big-ticket commercial purchases. This is our business and we're committed to working with customers to solve problems," he says. "But especially in an aircraft repossession case, California has more complex sales tax law than almost any other state."
"This is what it came down to," says Devito. "We needed specialist skills on the ground and in California. Those skills came in the form of Tom Alston from Aero & Marine Tax Professionals."
"The Board of Equalization has many complex rules," notes Tom Alston. "They audit every aircraft in California. These are big ticket items that can be a big source of revenue for the state."
People sometimes think sales tax exemptions are easy to qualify for, particularly under Part 135. There's a perception that the exemption will be automatic. Our experience is that the opposite is true. You need to follow the necessary processes and file all the appropriate paperwork, which can be a complicated and time consuming endeavor."
Alston's first priority was re-establishing a vital paper trail. Once the original owners of the aircraft had declared bankruptcy, much of the paperwork just got lost, he says. "That paper trail was key to getting a sales and tax exemption--in this case for charter work--and thus getting the lien lifted." From there, the GE team would be able to sell the aircraft.
"We were really impressed with Tom's grasp of the situation, especially as it concerned to California tax law," says Devito. "Tom was a valuable resource and knew precisely what strategies to use. When we need an expert in California, I know who to call."
The best news? Aero & Marine Tax Professionals was effective. "By mid-2004, we had our exemption and a new buyer for the aircraft," smiles Devito.
We now have a program in Arizona as well as California!
It's true! We've saved clients literally millions of dollars - I can guarantee you won't find anyone with more knowledge and experience. It pays to plan ahead so future aircraft or vessel acquisitions are properly structured. Plus, if you suspect the status of a purchase made anytime in the past 10 years - I will offer a free analysis of your situation. Go here and simply fill in the appropriate form. Or call me personally at 916-691-9192. - Tom Alston
