Fri, Apr 29, 2011
Maine Supreme Court Ruled He Was Not Subject To "Use Tax"
The state of Maine had sent Steve Kahn of Bedford, MA a bill for
$26,000 in taxes they said he owed on an airplane he flew in
the state in 2002 and 2003. This week, the Maine Supreme Court
ruled that he should not have been sent that bill, and ordered the
Maine Revenue Service to refund the money.
Maine charges a five percent "use tax" to non-residents who
bring an airplane to the state within the first year of ownership.
But in a 7-2 decision, the state's high court said that the "6-7
percent of the time" the plane was in Maine did not justify
charging Kahn the tax. The ruling means other aircraft owners may
seek refunds on taxes they were charged when they brought their
aircraft to Maine for business or personal travel. When Kahn was in
Maine, the law did not stipulate how long an aircraft had to be in
the state for it to be assessed the tax, according to a report in
the Portland Press Herald. The law is an attempt to
capture revenue from aircraft owners who do not pay state sales tax
on their airplanes, and can apply to other goods and services. The
law has since been changed to allow visits to the state of up to 20
days before the tax is levied.
Kahn had been in Maine at his vacation home, and participating
in the Angel Flight program transporting patients from rural Maine
to hospitals in Boston. He called the refund a "moral victory,"
saying he didn't think he would ever see the money again. Kahn's
attorney said the court was drawing a line by ruling in favor of
Kahn, but not saying where that line is.
That's because a Florida businessman also represented by the
attorney, who was assessed a $117,000 tax bill for keeping his
airplane in Maine for 156 days was not so lucky. The court ruled
that owner would not be receiving a refund on the use tax.
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