Michigan USE tax after 38 years?

USA Discussion in 'General Tax Discussion' started by Theogaster, Dec 6, 2018 at 9:03 PM.

  1. Theogaster


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    I am the treasurer of a small 5 member airplane flying club organized as a non-profit corporation in Ohio, with assets of a single engine aircraft (1972, 2 seat Citabria) and a small checking account that we have had in Michigan for about 38 years (we think) On Dec 1, I got a letter from the Michigan department of taxation demanding that we show proof of having paid 6% Michigan sales/use tax, or it implied we will be assessed 6% plus interest and penalties. I was given two forms to fill out (#1989 and #4281)

    The airplane has been registered to the club (as shown on the FAA registry since 1980 and has been kept in a hanger just inside Michigan, near Toledo Ohio. It has had Michigan registration for as long as anyone can remember, probably also since 1980. The Forefathers of the club that purchased the airplane are now buried, and we have no records of sale price, proof of taxes paid (or reason to think they weren't paid), or where the sale was made. Probably unrelated, but relevant to our overall situation is that this October 2019, the airplane suffered a prop strike, with damages approaching its value. It may therefore soon be in a state of "salvage", although there is some limited insurance coverage. Prior to that, it was worth about $25,000.

    When I became treasurer in 2016, I sent in the federal aircraft registration renewal. I used my home address, which is in Michigan, vs the prior treasurer being in Ohio. I suspect that that is what triggered the attention from Michigan, since it is the only change in the last couple decades. The aircraft was registered as an aircraft in Michigan (MDOT registration) all along, so why should it matter?? Stupid on my part, I guess, but the horse is out of the barn.

    Any intelligence on how to fill out the Michigan Aircraft Transfer Questionaire (form 4281) or otherwise respond to the Michigan Dept of Treasury would be much appreciated. Are they likely to take the airplane?

    Thanks for any Assistance.

    Theogaster, Dec 6, 2018 at 9:03 PM
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