State May Reduce Enormous Property Tax on Airplanes
South
Carolina, trying desperately to squeeze every possible dollar out
of "rich" airplane owners, managed to do something completely
different: squeeze the planes out of South Carolina.
In a Karen Addy story in the Beaufort (SC)
Gazette, we've learned that, "Sen. Wes Hayes, R-Rock Hill,
says counties that share a border with North Carolina and Georgia
are missing out on significant revenue thanks to the 10.5 percent
assessment rate on aircraft. He said that in York County, for
example, most pilots and businesses keep their planes in nearby
North Carolina, where aircraft taxes are two and a half times
lower." [Of course, taxes can't be "two and a half times
lower" (ONE time lower would be free), but you get the idea
--ed.]
One Senator Gets It:
Hayes (right) has the idea, though: the more
you tax something, the more you drive it away. "We're charging
(10.5 %) on nothing," he told the paper. "Plus, we lose the hangar
rental, the gasoline sales and potentially the businesses that go
with these planes. It puts us at a competitive disadvantage."
The state has two criteria designed to capture the tax, and it
looks like some airplane owners have figured out how to turn those
criteria around. The state hits owners with that 10.5% property
tax, if the owner lives in the state; or if the plane is located in
the state on January 1 of any given year. What seems to have
happened, is that a lot of the aircraft are out of state over New
Year's.
Sen. Scott Richardson, R-Hilton Head Island, pointed out that
his state taxes boats at the same rate, eith the same result: "Here
in Hilton Head you can go through any marina and 90 percent of the
boats are registered in Maryland, Delaware, Bermuda... The bottom
line is that our property taxes are so high that virtually no boats
and planes are registered in South Carolina."
A lot
of airplanes, legislators found, are based in South Carolina, yet
somehow owned by LLCs in Deleware -- limited liability corporations
that are themselves -- surprise -- owned by South Carolinians.
Florida and Delaware are the closest states with no property
taxes. The trick for South Carolina is to find a tax rate that is
low enough to be worth the hassle of owners' staying on the thin
edge of the law. Some, who still favor extracting as much tax as
possible from the remaining owners, use that argument to keep taxes
high -- that any amount of hassle will drive so many into
other states, that it's a better idea to just fleece the poor
jokers who will stay, at any price.