California Reinstates 90-day Tax-Exemption Test

Because of a budget compromise agreed upon by California's Senate in August, aircraft buyers in that state will again get a tax break that was taken away three years ago. That's when lawmakers changed the use-tax-liability test period, requiring out-of-state aircraft purchasers to keep their airplanes out of California for a year-rather than 90 days, the previous rule-to avoid the tax. By lengthening the period, the state hoped to increase tax revenue, according to Stephen Hofer, president of Aerlex Law Group in Santa Monica, Calif. That plan didn't work, Hofer said, and, for aircraft purchased after July 1, 2007, the 90-day rule will again apply.