Aircraft purchase , buyer in sales tax exempt State, seller in State w/sales tax...

I live in Oregon where we have no sales tax. I am buying an aircraft from an individual in Washington, which has a sales tax. The airplane will reside in and be titled in Oregon. Will I be hit for sales tax legally ??

17 Replies
Ronald Levy
1590 Posts

@Thom Warren
Good question to ask of an attorney knowledgeable on the laws of the two states, and that's not me.  But I suspect the key issue will be where the transaction actually takes place.  Also, if you have a sales contract, that contract should specify which state's laws govern the sale.

The contract says the agreement shall be governed by the laws of Washington but if closing location were designated Oregon, maybe that is a remedy ?? 
 

@Thom Warren
Here is a link to an article that gives some information that may help.  Impact of Oregon Commercial Activity Tax on Aircraft Closings - Aero Law Group PC

I would recommend speaking with a tax professional.  I am neither an attorney nor a tax professional.  Having said that, it appears that Washington state has a fly away exemption which states that the sales tax in Washington state does not apply to non-residents when the buyer is a resident of a state other than Washington state which has a sales or use tax of less than 3%.  See the following reference.  (RCW 82.08.0273 and Excise tax Advisory #2014.08.193)

@Thom Warren
I live in Idaho and bought an airplane out of Washington State last year. Never received correspondence from Washington State, just Idaho for sales tax several months after I registered it with the FAA. So just buy it and fly it home or have seller deliver it.

J Killian
45 Posts

@Thom Warren
I am retired CPA and lived in Oregon 10 Years and currently live in Washington.  Quick answer, you are exempt from sales tax in Washington if you are an Oregon resident.  Oregon used to issue to any Oregon citizen a tax exemption card if you wanted one that would exempt you from any sales tax in another state.  Example, many Oregonians used to drive to Vancouver for shopping  - including Auto purchases - showing the card made it easier for the Washington merchant to classify the sale as a “non taxable sale” and he needed your tax exempt card number.