Hey Pennsylvanians, Buy a Helicopter Lately?
Posted by salestax on November 10, 2009
So, it took Pennsylvania 90 days to come up with a budget, but did you know that there were a few items (well maybe 3 if you count the pending amnesty – or maybe 4 if you count the increased Philadelphia local tax), that affected sales tax? Among them:
1. Pending Amnesty period coming in 2010.
2. Philadelphia Local Sales Tax increased to 2% – totalling 8%
3. Not such a big deal for most companies, but if you end up collecting more than 25K in sales taxes during the third quarter of 2010 (July-Sept.), come June 2011, you’ll be required to remit semi-annual sales tax payments. A real pain in the you-know-what to do this when it first starts, but I’m sure estimates will be allowed and if you do it anywhere else (such as OH), you already know the drill.
4. THE BIG DEAL (input sarcasm here): EFFECTIVE IMMEDIATELY – if you purchase a helicopter or any other kind of rotocraft, you do not have to pay the 6% sales tax. And, if you already owned one before they came exempt, the repairs and maintenance charges of all helicopters are now exempt as of 10/9/09.
Now, I wonder what PA company wants to buy a helicopter and they felt the need to hire lobbyists to help save the sales taxes on it. Turns out, that wasn’t the case at all. You can read the real story here.
But I still don’t get it. The manufacturer of these helicopters is already exempt on most of what they purchase to manufacture the rotocraft – it’s called an already existing manufacturing exemption. The sale – well that’s on the buyer to pay sales tax and the manufacturer simply remits it to the state (if they’re also the retailer) – and gets a 1% discount for collecting it. Plus, if most of their contracts are with Federal Gov’t, they’re not collecting any sales taxes anyway. So, no taxes collected, no taxes remitted – just a blank form to mail. But let’s say for the sake of argument, Wal-Mart wanted one of these helicopters to house in PA- at a price of $1,000,000. That would be $60,000 to collect and then $600 of that goes to the manufacturer for remitting it. Just don’t get it. And really, how many of the taxable helicopters did they plan to sell to PA domiciled companies or taxpayers? Cause, also, if it’s shipped out of PA, it’s not taxable in PA. I think the term “Walking Around Money” is a good one.