len johnson/ california taxes

[dave]

hi guys,
   if you live in cali...hope you have read the len johnson case on our front page.. im pretty concerned....this might and eventually affect a lot of  experimental builders (not only canards).. specially ones living in california...SCARY STUff.....IT has halted my purchase of a "project" i was wanting to buy..and finish....
   can anyone help?...does anyone know?..... :shock:
   this could be the future of homebuilding... :cry:

[Greg]

For those of us that do not live in California - can you tell us what paper you are talking about and what the issue is?

[NWade]

You can find the article on the www.ez.org homepage - it is the top news item on the page.

I personally don't think this situation will last - its too open-ended; and Orange County has been recovering from a bad bankruptcy over the last 10 or 15 years - so I'm not surprised they're the first ones to try this.  As soon as it affects someone with lots of money, there will be a legal challenge to it.

Now, for those (like me) that don't have lots of money, I suggest doing the same thing I (and others) have emailed to Len:  

Contact the AOPA and EAA and let them know!  Organizations like these typically have lobbyists and lawyers on their staff, right?  Put them to good use!  Raise the profile of this potential crisis - heck, maybe one of the pilot magazines will be interested in writing an article about it.  Anything to put pressure on OC to make them back down.  Its obvious to me that they're trying to quietly raise their revenues; and hoping that no one will be willing to get into a legal fight over it.

Take care,

--Noel

[Anonymous]

You can find the article on the www.ez.org homepage - it is the top news item on the page.

I personally don't think this situation will last - its too open-ended; and Orange County has been recovering from a bad bankruptcy over the last 10 or 15 years - so I'm not surprised they're the first ones to try this. l

Not many recall they went bankrupt either and they stiffed some locals they owed bucks too.

Main problem in this case, they own the courts and the process.

Short version of OC going bankrupt, they didn't watch their investment guru and even tried pushing their product across the State. Santa Barbara got burned for some 40 odd million bucks too.

California since Prop 13 passed, has been very creative in creating revenue sources.

Ironic if this crap passes and spreads. California was kinda the start of the big homebuilding effort.

Jack

[Drew]

<snip>THIS GREATLY AFFECTS...NOT JUST ALL BUILDERS..and Buyers of experimentals.. but also certified aircraft owners / and buyers . <snip>

While it may affect cert owners and buyers, I fail to see the relative impact unless you are a cert owner doing a restoration.

Len has a great article.  OC could have either assessed the value of materials or the market value of the plane but instead assessed the materials+build time to arrive at a 250k or so figure for a Cozy (give me a break!).  One of the reasons we build these SUV priced airplanes is because we can't afford 250K airplanes!

Too often I have seen the attitude---- if you own an airplane you must be rich----therefore that gives us the right to sock it to you-----because you deserve it.

I have already written a letter to AOPA.  I hope there is a groundswell of activity on this.

[Charles Davis]

Since when is a service taxable?

[Drew]

<snip>Since when is a service taxable?<snip>
I believe what they are trying to do is to arrive at the fair market value of the airplane for tax purposes.  Unfortunately, their method does not work for homebuilt aircraft.  They probably don't care that their method does not work and are willing to go after a "small" group of people (homebuilt aircraft owners) who they don't think will make that much noise

[Charles Davis]

What about the concept of an appraisal?  You can get comparable fair value by printing lists from EZ.org sales or Barstormers.com.

Nothing is worth what you have invested in it.  It's worth more or less based on what the fair market value is.  We may be foolish for spending years working for pennies and hour, but we shouldn't be taxed for it.