Dan, I'm going to give you a very generic answer. Individual, partnerships, LLCs and corporations can be excluded from paying and collecting sales tax if they buy items for resale. Items purchased for business usage are taxed, ie., copy machine paper, ink, pens, vehicles, airplanes. It you form a corporation or LLC you now are required to file income tax returns. With income tax returns, items owned by the corporation and used by it's shareholders must be reported as income to the shareholder based upon a fair market value of asset usage. Example, you use the corporate airplane for personal use. It doing so you are receiving compensation via usage and must receive a 1099 for income in excess of $600 yearly. So, if you form a corporation to avoid sales tax, whether it is Delaware, NC or Timbucktoo the IRS is still going to see to it you are income taxed at the fair market value of the asset usage. So lets think about this; you use the airplane for 200 hours per year. The average retail rate is $65. You just "earned" in excess of 12000.00 in taxable income on your personal tax return. Now, let think about fuel. If you buy it, it must go into the corporated as donated capital, if the corporation buys it and you use it for personnal usage............income to you. Distributable income, just where did this corporation get it's money to buy all this "stuff" for the shareholder to use.............follow me here......you donate the fuel money, insurance money, property tax money then have to report it as income on your personal tax return just to save some up front sales tax money????? Bite the bullet, pay the sales tax and enjoy "your" airplane.
Notice the "tag" at the end of my name. Dana Overall, CPA 1999 & 200 National KR Gathering host Richmond, KY i39 RV-7 slider, Imron black, "Black Magic" Finish kit 13B Rotary. Hangar flying my Dynon. http://rvflying.tripod.com http://rvflying.tripod.com/blackrudder.jpg do not archive
