BREAKING!!! U.S. Will Require Drones to Be Registered

[pchin2]

Hopefully it's just a one time registration fee. Otherwise, we'll pretend our drone is defective or no more flying hence no longer require to renew. Worst case scenario if caught while flying without renewal, we plead ignorance -overlook (oh it's expired already?) & pay the "fine". So everyone should relax & take a kit-kat.

 

[Pulsar747n]

1) There are already laws that address sales taxes for online purchases. There is no law that allows tax to be collected on a drone that has already been purchased. Registration of ownership will not change that.

2) So far there is no indication whatsoever that these toys will be taxed as property. No such law currently exists to enable that. Requiring registration has nothing to do with taxation. We will probably have to pay a minimal one time registration fee - much like I pay to license my two dogs each year. But until any such requirements are implemented, all of these predictions are just speculation and fearmongering.

Please remember that I am in your side. Some of us have dealt with the FAA long enough to predict some outcomes, but some times we can be surprised of course!
The FAA classified drones as aircrafts. Why will the FAA would want to change the way they regulate aircrafts or these new drones?
The States get registration information from the FAA on a regular basis. It will be very easy for the States to say that since the FAA considers UAS, aircraft, they have the right to make sure that they collect sales tax on out of State purchases of Aircraft (if the State has sales tax) and/or registration or property taxes or fees as per their current legislation.

 

[ianwood]

[

#286 was a good post. But if our drones are under the area of DOT. Its the cops that enforce the local DOT laws. So I can see it happening, old cranky people calling the cops on all drones or pilots they see after learning cops will come around to check for the license. Then if you don't have the license the cops seize the drone and the costs to attempt get it back are just not worth it. I don't see any good coming from this.

I was flying at a Lake last Sunday up 300 foot and my wife heard a noisy aircraft, looked over this biplane was flying at only 200 feet and much lower then my P3P. I was about 1.2 miles from him and landed to avoid any issues. I don't think what he did was legal, is the FAA going after him? Nope, the FAA is a bunch of fatsos in a gov office surfing reddit for cat photos who don't answer the phone.

I think you just made the case for registration. Accountability. Yes, it's not easy to catch a tail number in the air but with registration, flight plans, ADS-B logs, etc. there's at least a chance you can. If you report him to the FAA, they will investigate.

 

[GoodnNuff]

LOL You really think they won't tax it? That's the whole purpose of registration, either taxatoin or confiscation. It doesn't prevent any crimes.

You just said "We will probably have to pay a minimal ONE TIME registration fee" then followed that with "much like I pay to license my two dogs EACH YEAR."

Ringing any bells yet? It'll be annual fee and you can say "until it happens", but then it's too late. Once a tax is in place, good luck getting rid of it. Call it fear mongering if you like, but I learn from history.

I repeat: But until any such requirements are implemented, all of these predictions are just speculation and fearmongering.

I'm telling you what I think, what my opinion is. Yes, I think it will be a ONE time fee, as easy to pay as it is when I pay my ANNUAL dog tags each year. Not paying my dog's license fee won't prevent me from keeping my dog, but it will provide a consequence when I walk my dog in the park and animal control catches me. Much like most laws - hopefully they will prevent some from breaking said law, but reality is that they will be broken and the law ensures that there will be consequences.

I'm tired of this insipid argument that "registration equals confiscation" I've registered a hell of a lot of my things in my 50+ years and never had a single one confiscated as a result.

 

[GoodnNuff]

Please remember that I am in your side. Some of us have dealt with the FAA long enough to predict some outcomes, but some times we can be surprised of course!
The FAA classified drones as aircrafts. Why will the FAA would want to change the way they regulate aircrafts or these new drones?
The States get registration information from the FAA on a regular basis. It will be very easy for the States to say that since the FAA considers UAS, aircraft, they have the right to make sure that they collect sales tax on out of State purchases of Aircraft (if the State has sales tax) and/or registration or property taxes or fees as per their current legislation.

That is your opinion. Thanks for sharing it. But at this point....it is all speculation.
What do you speculate the annual taxes will be on this $900 piece of property?
Or do you speculate it will be a one time tax?

 

[SteveMann]

1) There are already laws that address sales taxes for online purchases. There is no law that allows tax to be collected on a drone that has already been purchased. Registration of ownership will not change that.

2) So far there is no indication whatsoever that these toys will be taxed as property. No such law currently exists to enable that. Requiring registration has nothing to do with taxation. We will probably have to pay a minimal one time registration fee - much like I pay to license my two dogs each year. But until any such requirements are implemented, all of these predictions are just speculation and fearmongering.

Don't confuse the federal fees and state taxes. currently the FAA charges a fee of $5 to register an aircraft for three years. As I said, the sales tax in your state is probably legally titled a "sales and use tax". The state absolutely as the right to tax you on out of state purchases. States audit the aircraft registrations (public record) precisely to collect sales/use tax on out of state aircraft purchases.

If someone living in a state with a sales/use tax and buys consumer goods in a tax-free state or on the internet, they still owe the tax to their home state. States don't try to collect the tax from the individuals because the cost of collecting the tax is often more than the tax revenue that would be generated, but the tax is still owed. An aircraft could bring in $10-20,000 in one transaction, so the states will collect on aircraft sales.

 

[SteveMann]

Or do you speculate it will be a one time tax?

Again, don't mix State taxes and Federal fees. I am not aware of any state sales/use tax that is multi-year. Some states do have an aircraft registration that has to be periodically renewed. But Sales Tax and Use Tax is generally due one time when you take possession of the item being taxed.

 

[damitjim01]

My state has a use tax and a personal property tax on vehicles. While the use tax is a one time tax, the personal property tax is annual.

 

[Tricky]

Here is the FAA document that officially opens the task force. We have 15-days to submit comments. BE NICE with your comments - this is your opportunity to tell the Task Force why this is a bad or unworkable plan. Be nice and be factual.

Regulations.gov

Thx Steve - part of me wants to comment in the section you provided, part of me doesn't want my name appearing anywhere near where this task force is prodding.

Anonymity might be the rule of the day.

Anyway, they've made their decision, so what's the point of commenting...I mean, seriously, their press conference set out precisely what they plan to do...so there seems to be no point in leaving a comment.

 

[GoodnNuff]

Don't confuse the federal fees and state taxes. currently the FAA charges a fee of $5 to register an aircraft for three years. As I said, the sales tax in your state is probably legally titled a "sales and use tax". The state absolutely as the right to tax you on out of state purchases. States audit the aircraft registrations (public record) precisely to collect sales/use tax on out of state aircraft purchases.

If someone living in a state with a sales/use tax and buys consumer goods in a tax-free state or on the internet, they still owe the tax to their home state. States don't try to collect the tax from the individuals because the cost of collecting the tax is often more than the tax revenue that would be generated, but the tax is still owed. An aircraft could bring in $10-20,000 in one transaction, so the states will collect on aircraft sales.

Not quite true Steve.
Research the Marketplace Fairness Act.
Generally speaking, if an online retailer maintains a physical presence in a state that charges a sales tax on most purchases, then that online retailer must charge sales tax on any items that are sold to customers within the home state. However, if the online retailer is selling an item to a customer outside of its home state, then it is not required to collect sales tax from that customer.
"Use Taxes" are collected directly from the consumer, and are only collected on large ticket items which are purchased in other states, such as boats, cars, and RV's. A sewing machine, a PC or a drone are not subject to use taxes when purchased out of state.
50-State Guide to Internet Sales Tax Laws | Nolo.com

 

[GoodnNuff]

Again, don't mix State taxes and Federal fees. I am not aware of any state sales/use tax that is multi-year. Some states do have an aircraft registration that has to be periodically renewed. But Sales Tax and Use Tax is generally due one time when you take possession of the item being taxed.

I'm not confusing taxes Steve. I haven't even named the taxes that I refer to as "sales," "property," "user," or "luxury" taxes so I don't see how you think I've confused them.

Again, when I asked if the speculation would be an annual tax (i.e., user, luxury, property taxes), or a one time tax (i.e. sales tax), that is exactly what I asked with no confusion.

 

[SteveMann]

Thx Steve - part of me wants to comment in the section you provided, part of me doesn't want my name appearing anywhere near where this task force is prodding.

Anonymity might be the rule of the day.

Anyway, they've made their decision, so what's the point of commenting...I mean, seriously, their press conference set out precisely what they plan to do...so there seems to be no point in leaving a comment.

You can post anonymously, but your comments are more likely to be dismissed or simply tabulated. The FAA has on many occasions changed their proposed rulemaking from comments from the public. I am proud of the fact that in an FCC petition (RM-18803) my comments were almost taken verbatim into the final rule (Sec. 97.119 'Station identification'). So comments do matter. My comments to the FAA Part 107 NPRM was 30 pages in 10-point type, so we will see if it has any influence.

If you don't participate in the rulemaking process, don't complain about the results.

 

[Tricky]

If you don't participate in the rulemaking process, don't complain about the results.

That is impressive that your comments made it to rule making. Clearly you are thoughtful and intelligent, and the FAA took notice. Though I imagine this rule you mention was not front page national headline news at the time.

I don't plan to complain about the results. I agree with you...stand and be heard and all.

But this proposition smells from the beginning. So rather than share an opinion with them, I will sit back and watch this train wreck. Public outcry caused this press conference in the first place. We know the drone "sightings" are mostly bogus...and that has been discussed plenty here...."I can't see my white tiny drone as I stand still from 300 yards, how can a commercial pilot see it at 150MPH?" He can't.
So already they are starting on a misinformed foot. How many civilian UAS operators were on that dais for the press conference? How many on that dais have ever operated a phantom? Probably one. Maybe.

So, in my opinion, it stinks from the beginning. Good luck with the meaningful hunt for a tax without a cause.

 

[SteveMann]

Not quite true Steve.
Research the Marketplace Fairness Act.
Generally speaking, if an online retailer maintains a physical presence in a state that charges a sales tax on most purchases, then that online retailer must charge sales tax on any items that are sold to customers within the home state. However, if the online retailer is selling an item to a customer outside of its home state, then it is not required to collect sales tax from that customer.
"Use Taxes" are collected directly from the consumer, and are only collected on large ticket items which are purchased in other states, such as boats, cars, and RV's. A sewing machine, a PC or a drone are not subject to use taxes when purchased out of state.
50-State Guide to Internet Sales Tax Laws | Nolo.com

As I said, it depends on which state - look up your state's sales tax law, and the odds are is is titled "Sales and Use" tax.

Sales Tax Institute:

'What is the difference between sales tax and use tax?
The sales tax is imposed on retail transactions. It applies to all retail sales of tangible personal property, and in some states services, in the state. The use tax is imposed on consumers of tangible personal property that is used, consumed, or stored in this state. Consumer’s use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Sales and Use tax generally applies to most leases of tangible personal property. The sales tax and the use tax are "mutually exclusive", which means either sales tax or use tax applies to a single transaction, but not both.'
​

Here, I'll save you the time:
Washington Use Tax

"What is use tax?

Use tax is a tax on the use of goods or certain services in Washington when sales tax has not been paid. Goods used in this state are subject to either sales or use tax, but not both. Thus, the use tax compensates when sales tax has not been paid.​

When is use tax due?

Use tax is due if:

Goods are purchased in another state that does not have a sales tax or a state with a sales tax lower than Washington’s. For example, items you purchase in Oregon that are used in Washington are subject to use tax.
Goods are purchased from someone who is not authorized to collect sales tax. For example, purchases of furniture from an individual through a newspaper classified ad or a purchase of artwork from an individual collector.
Goods are purchased out of state by subscription, through the Internet, or from a mail order catalog company. Many of these companies collect Washington’s sales tax, but if the company from which you order does not, you owe the use tax.
Personal property is acquired with the purchase of real property."​

There is no mention of "large ticket items" in the law. In the State of Washington, if you buy a sewing machine in another state then bring it home to Washington, you are subject to paying a use tax on it. The state doesn't pursue use tax on anything other than large ticket items because the cost of collection would probably exceed the revenue produced.

 

[GoodnNuff]

As I said, it depends on which state - look up your state's sales tax law, and the odds are is is titled "Sales and Use" tax.

Sales Tax Institute:

'What is the difference between sales tax and use tax?
The sales tax is imposed on retail transactions. It applies to all retail sales of tangible personal property, and in some states services, in the state. The use tax is imposed on consumers of tangible personal property that is used, consumed, or stored in this state. Consumer’s use tax applies to purchases from out-of-state vendors that are not required to collect tax on their sales. Sales and Use tax generally applies to most leases of tangible personal property. The sales tax and the use tax are "mutually exclusive", which means either sales tax or use tax applies to a single transaction, but not both.'
​

Here, I'll save you the time:
Washington Use Tax

"What is use tax?

Use tax is a tax on the use of goods or certain services in Washington when sales tax has not been paid. Goods used in this state are subject to either sales or use tax, but not both. Thus, the use tax compensates when sales tax has not been paid.​

When is use tax due?

Use tax is due if:

Goods are purchased in another state that does not have a sales tax or a state with a sales tax lower than Washington’s. For example, items you purchase in Oregon that are used in Washington are subject to use tax.
Goods are purchased from someone who is not authorized to collect sales tax. For example, purchases of furniture from an individual through a newspaper classified ad or a purchase of artwork from an individual collector.
Goods are purchased out of state by subscription, through the Internet, or from a mail order catalog company. Many of these companies collect Washington’s sales tax, but if the company from which you order does not, you owe the use tax.
Personal property is acquired with the purchase of real property."​

There is no mention of "large ticket items" in the law. In the State of Washington, if you buy a sewing machine in another state then bring it home to Washington, you are subject to paying a use tax on it. The state doesn't pursue use tax on anything other than large ticket items because the cost of collection would probably exceed the revenue produced.

Ok Steve. I drive 2 hours to Portland Oregon where I do most of my big ticket shopping since there is no sales tax. All of my electronics are purchased in Portland. All of my camping gear is purchased there. In fact, outside of food (which is exempt from sales tax in our state), most of my shopping is done in Oregon, Vancouver B.C., or online.

Please explain to me the mechanism Washington state has set up to collect use tax on items purchased out of state?

Please explain how and to whom I report these purchases?

Please explain how these transactions are monitored by my state?

Thanks....

 

[bbfpv]

Ok Steve. I drive 2 hours to Portland Oregon where I do most of my big ticket shopping since there is no sales tax. All of my electronics are purchased in Portland. All of my camping gear is purchased there. In fact, outside of food (which is exempt from sales tax in our state), most of my shopping is done in Oregon, Vancouver B.C., or online.

Please explain to me the mechanism Washington state has set up to collect use tax on items purchased out of state?

Please explain how and to whom I report these purchases?

Please explain how these transactions are monitored by my state?

Thanks....

Start here: Use tax

 

[SteveMann]

I'm not confusing taxes Steve. I haven't even named the taxes that I refer to as "sales," "property," "user," or "luxury" taxes so I don't see how you think I've confused them.

Again, when I asked if the speculation would be an annual tax (i.e., user, luxury, property taxes), or a one time tax (i.e. sales tax), that is exactly what I asked with no confusion.

There is currently no federal Luxury Tax. A luxury tax is counter-productive. In 1991, President ("No New Taxes") Bush signed a Luxury Tax bill to generate new revenues. The tax was a 10% luxury surcharge tax on boats over $100,000, cars over $30,000, aircraft over $250,000, and furs and jewelry over $10,000. Two years later tax was repealed because revenues were disappointing and were offset by the lower incomes of the sellers and makers of the luxury items.

Some states do impose a property tax on personal goods including aircraft and boats, but most exempt household items again because the cost of collection exceeds the potential revenue.
Again from the Washington State documents:

"Personal Property includes any property that is not real property, that is, not permanently fixed to or a part of real estate. Machinery, equipment, furniture, fixtures and supplies associated with commercial, industrial or agricultural enterprises are assessed and taxed as personal property. Business inventories, household goods and personal effects are exempt from the property tax."
​

To answer your question, currently the FAA charges a fee of $5 to register aircraft. The registration expires after three years where the owner re-registers the aircraft for another three years. The fee for re-registration is still $5. Most states periodically audit the aircraft registration (it's public information) for aircraft in their state. A use tax and/or a property tax bill may be generated. It varies from state to state and even county to county.

It is the aircraft registration that triggers the state tax authority into a collection action.

 

[GoodnNuff]

"There is no mention of "large ticket items" in the law. In the State of Washington, if you buy a sewing machine in another state then bring it home to Washington, you are subject to paying a use tax on it. The state doesn't pursue use tax on anything other than large ticket items because the cost of collection would probably exceed the revenue produced."

Umm...Steve, isn't that just what I said? I wasn't quoting law when I used the word "big ticket" but was talking from the fact that I'm a resident of Washington State and have a pretty good idea what I pay taxes on. The state only pursues use taxes on big ticket items. If I buy a Dyson vacuum in Portland, the state is not going to bill me for a use tax....

 

[GoodnNuff]

This is patently ridiculous. I am not going to argue what I pay in my state with someone who is playing armchair tax lawyer on the East Coast due to speculation on what may or may not happen with fees associated with our drones.
I mention Luxury tax (which many states have) and you want to argue that there is no Federal Luxury Tax (I never said there was). This will just go back and forth...

I have far better ways to use my time.

 

[GoodnNuff]

Start here: Use tax

Was there already.